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Sat, Dec 23, 2006 - Page 10 News List

Asia coping with rising currencies

AFP AND AP , SEOUL AND KUALA LUMPUR

South Korea has "unlimited resources" if it decides to curb the local currency's rise against the dollar which is hurting exporters, a senior government official said yesterday.

The remarks by Deputy Finance Minister Kim Sung-jin were the latest in a series of statements by financial authorities seeking to talk down the strong won.

The currency has risen nearly 10 percent against the US dollar this year, raising fear among exporters that their goods will be priced out of overseas markets.

It hit a nine-year high against the Japanese yen this month.

"The government will do its best to help stabilize the currency," Kim told a local radio program.

"Intervention in the foreign exchange market comes after consultation with the Bank of Korea. The financial resources for intervention can be considered unlimited and market players must keep this in mind," Kim said.

South Korea's fears are echoed elsewhere in Asia, with local governments increasingly concerned export-driven economies could be hit if their currencies continue to rise against the US dollar.

In Malaysia, however, the government yesterday said that it was not troubled over the rise of the country's currency, which has climbed to its highest level in nearly a decade.

Asked by reporters whether the ringgit was too strong, Malaysian Junior Finance Minister Nor Mohamed Yakcop said "not at all," adding that officials were "not worried" about the matter.

Comments from the two countries came after neighboring Thailand's central bank sought to weaken the surging baht earlier this week by announcing new rules targeted at controlling foreign investments.

Thai authorities did an about-face after the stock market was rocked by a historic plunge, lifting controls on foreign investment in stocks while keeping them on bonds.

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