South Korean President Lee Myung-bak called for calm yesterday as the won suffered its biggest daily loss for a decade, saying the nation need not fear a repeat of the 1997 to 1998 Asian Financial Crisis.
The current situation “is wholly different from the foreign exchange crisis of 1997,” he told a Cabinet meeting.
“Excessive optimism is dangerous but we don’t have to be mired in pessimism and a sense of crisis,” he said.
The local currency closed at 1,328.1 to the dollar, down 59.1 won from Monday’s close and the lowest level since April 12, 2002. The daily loss was the biggest since August 1998 when it fell by 70 won.
The currency has fallen 29 percent against the dollar so far this year, fuelling already high inflation.
“The won’s steep fall came as market participants panicked on concerns that financial market turmoil which started in the United States is spreading into Europe and other countries,” Jeon Seung-ji, an analyst at Samsung Futures, told Yonhap news agency.
The won plunged to 1,350 at one point but clawed back on dollar-selling by the authorities.
The forex market is suffering from a dollar shortage as banks and companies rush to the greenback on concerns of a global financial crisis.
The KOSPI benchmark stock index closed 0.5 percent higher on bargain-hunting by local funds.
“The government is now striving to expand its foreign exchange holdings and liquidity, while the corporate sector is making its own restructuring effort,” Lee said. “Above all, the most important thing is for the government to give confidence to the people.”
Lee and other top financial officials agreed that concerns over the risks posed by the possible redemption of the nation’s offshore debt are overdone, Deputy Finance Minister for Foreign Affairs Shin Je-yoon said.
“We admit that conditions are difficult, but considering the nature of the offshore debt, we can certainly handle the burden,” Shin said.
The meeting also decided to investigate whether markets have been manipulated.
“The trading volume is very thin these days, but [the dollar and won are] fluctuating heavily,” Shin said. “We smell something and we think it’s necessary to analyze.”
He said supply and demand will likely improve markedly once the current account swings to surplus. Authorities have spent almost US$25 billion since March trying to support the won, Yonhap reported.
The spending has cut foreign reserves to US$239.7 billion, still the world’s sixth-largest.
Rainfall is expected to become more widespread and persistent across central and southern Taiwan over the next few days, with the effects of the weather patterns becoming most prominent between last night and tomorrow, the Central Weather Administration (CWA) said yesterday. Independent meteorologist Daniel Wu (吳德榮) said that based on the latest forecast models of the combination of a low-pressure system and southwesterly winds, rainfall and flooding are expected to continue in central and southern Taiwan from today to Sunday. The CWA also warned of flash floods, thunder and lightning, and strong gusts in these areas, as well as landslides and fallen
WAITING GAME: The US has so far only offered a ‘best rate tariff,’ which officials assume is about 15 percent, the same as Japan, a person familiar with the matter said Taiwan and the US have completed “technical consultations” regarding tariffs and a finalized rate is expected to be released soon, Executive Yuan spokeswoman Michelle Lee (李慧芝) told a news conference yesterday, as a 90-day pause on US President Donald Trump’s “reciprocal” tariffs is set to expire today. The two countries have reached a “certain degree of consensus” on issues such as tariffs, nontariff trade barriers, trade facilitation, supply chain resilience and economic security, Lee said. They also discussed opportunities for cooperation, investment and procurement, she said. A joint statement is still being negotiated and would be released once the US government has made
SOUTH CHINA SEA? The Philippine president spoke of adding more classrooms and power plants, while skipping tensions with China over disputed areas Philippine President Ferdinand Marcos Jr yesterday blasted “useless and crumbling” flood control projects in a state of the nation address that focused on domestic issues after a months-long feud with his vice president. Addressing a joint session of congress after days of rain that left at least 31 dead, Marcos repeated his recent warning that the nation faced a climate change-driven “new normal,” while pledging to investigate publicly funded projects that had failed. “Let’s not pretend, the people know that these projects can breed corruption. Kickbacks ... for the boys,” he said, citing houses that were “swept away” by the floods. “Someone has
‘CRUDE’: The potential countermeasure is in response to South Africa renaming Taiwan’s representative offices and the insistence that it move out of Pretoria Taiwan is considering banning exports of semiconductors to South Africa after the latter unilaterally downgraded and changed the names of Taiwan’s two representative offices, the Ministry of Foreign Affairs (MOFA) said yesterday. On Monday last week, the South African Department of International Relations and Cooperation unilaterally released a statement saying that, as of April 1, the Taipei Liaison Offices in Pretoria and Cape Town had been renamed the “Taipei Commercial Office in Johannesburg” and the “Taipei Commercial Office in Cape Town.” Citing UN General Assembly Resolution 2758, it said that South Africa “recognizes the People’s Republic of China (PRC) as the sole
RSS