(Bloomberg) -- South Korea’s current currency weakness is different from the situation the country faced during the global financial crisis or the Asian market turmoil in the late 1990s, according to the country’s finance minister.
“You don’t have to worry excessively,” Choo Kyung-ho said on a television show Sunday. “We have about $430 billion worth of foreign reserves, which ranks the 9th in the world.”
South Korea holds foreign assets worth about $740 billion, compared to a deficit in both 1997 and 2008, he said. The minister also cited comments from the International Monetary Fund in August that the Asian country has the economic fundamentals to withstand external shocks.
Choo’s remarks underscore the latest government efforts to assuage concerns about a currency that has just suffered its seventh weekly decline against a surging dollar. The won has fallen about 7.7% against the greenback in the past three months, making it the region’s worst performer.
The country has a “mix of measures” to stabilize markets, including “liquidity facilities” that Korean President Yoon Suk Yeol and his US counterpart Joe Biden agreed last week to cooperate on, Choo said. The minister also mentioned authorities’ efforts to provide dollars to Korea National Pension Service for the fund’s overseas investments, a factor that may contribute to the won’s weakness.
Separately, the minister said there’s no urgency to pursue a currency swap with the US. “International financial organizations say South Korea is not in a situation to consider it,” he said. “The US also says they want to monitor our situation, rather than mentioning the necessity for a currency swap with us.”
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