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| China-Japan-Koreas |
| South Korea to Guarantee Foreign Debt |
| 2008-10-20 |
| TOKYO, Oct. 19 -- To shore up a tumbling stock market and a troubled currency, South Korea announced Sunday it would guarantee $100 billion of foreign debt and supply $30 billion to banks and exporters in urgent need of dollars. Amid a global financial crisis, South Korea has emerged as perhaps the most vulnerable major economy in Asia, despite plenty of foreign reserves in its central bank and booming exports to China, India and the Middle East. The credit ratings agency Standard & Poor's placed five major South Korean banks on a watch list last week, citing their problems in finding dollars to pay back foreign currency loans. President Lee Myung-bak has pleaded with citizens to stop hoarding dollars and "refrain from greedily pursuing private interests." Still, finance and central bank officials in Seoul had resisted the kind of sweeping guarantees to banks and financial institutions that have been offered in the United States, Europe and elsewhere in Asia. They had repeatedly said that the fundamentals of their country's economy were strong -- and blamed the foreign press for exaggerating financial problems. |
| Posted by:Steve White |