South Korean banks

South Korea announced about its bank’s foreign exchange traffic up to $100 billion with the aim to support markets throughout the financial crisis. This decision was taken in cooperation of the country government with the central bank. They have also added that central bank will provide $30 billion in liquidity with the aim to support the banks and exporters of the country as well as to help small banks in obtaining loans from foreign exchange reserves. Furthermore all deals of the banks of the country with international institutions made in foreign exchange from October 2008 to June 2009 will be covered for a period of three years.

Moreover South Korea announced that it wouldn’t purchase stakes in its banks at the moment but in case there will arise such necessity to secure deposits it will do so. According to Kang Man-soo the finance minister of the country the government of the country took a decision to contribute to global efforts in stabilizing global financial crisis and will continue to pursue such policy until it is needed. The guarantee for the bank’s foreign exchange deals is supposed to be the best way to save foreign exchange reserves of the country and provide more stable use of these reserves in the future.

As for the currency of the country it has declined to its 10 year ago level. The foreign exchange reserves are also decreasing during six months. Finally the stock markets declined to its 3 year ago level.

According to James Rooney from the Seoul Financial Forum the economy of the country has no direct problems at the moment however the low liquidity level of its foreign exchange markets is already persist even despite great foreign exchange reserves of the country.

Thus due to his words the government of the country will provide support to those in negotiations for short-term loans and will try to decrease the pressure over the Korean currency – wong.

economic factors and forex