May 05, 1999
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| May 05, 1999 | atimes.com | |
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| The Koreas S. Korea to boost U.S. dollar demand MANILA - South Korea's Finance andEconomy Minister Lee Kyu-sung announced Friday a series ofmeasures aimed at expanding U.S. dollar demand in his country. ''The recent excessive rise of the won due to the inflows ofstock funds from abroad and selling by Korean exporters is notdesirable for the country's economy,'' Lee said, explaining that themeasures were aimed at alleviating supply concerns in the local market. At a press conference, Lee said the government would askKorean financial institutions to advance repayment of theirshort-term foreign debt of $17.9 billion due next year andin 2001 in the latter part of the year, as part of measures toincrease dollar demand in the Seoul currency market. The minister was attending the 32nd annual conference of theAsian Development Bank (ADB). Seoul will also encourage overseas subsidiaries of Koreancompanies, except for those in the top five groups, to buyforeign currency locally with won funds raised via issuance ofcorporate bonds and pay off their foreign debt by as much as$500 million by the end of the second quarter. The measures include the purchase of $900 million in thedomestic foreign exchange market by the state-run Korea AssetManagement Corp., to secure funds to acquire non-performingforeign currency bonds held by financial organizations. International organs, including the ADB, can raise foreigncurrency by issuing Arirang bonds, or won-denominated bonds inSouth Korea. The minister also announced that the Bank of Korea will buy$1.1 billion accrued from the planned issuance of $1.8 billionin depositary receipts (DRs) to offer Korea Telecom (KT) stocksoverseas in May. The government expects to get the $1.1 billionfrom the offering of its stake in the telecoms operator. The government plans to deposit overseas the remainingproceeds from the deal in order to lessen the impact on thelocal currency market. The measures were expected to create about $4.6 billion indollar demand in the second quarter, when an oversupply of anestimated $4.5 billion will hit the Seoul currency market, he said. (Asia Pulse/Yonhap) | |||||||||
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