Arab Today, arab today south korea earns \safe haven status\ from foreign investors
Last Updated : GMT 04:31:27
Arab Today, arab today
Arab Today, arab today

South Korea earns \'safe haven status\' from foreign investors

Arab Today, arab today

Arab Today, arab today South Korea earns \'safe haven status\' from foreign investors

Seoul - Yonhap

South Korea is getting \"safe haven status\" from foreign investors as its current account surplus and the accumulated foreign reserves are serving as defense against possible cross-border capital flight, experts said Sunday. South Korea used to suffer from massive foreign capital outflows whenever a financial crisis cropped up. But Asia\'s fourth-largest economy is now differentiating itself from other emerging countries such as India and Indonesia which are struggling to curb capital outflows and currency depreciation, sparked by speculation over U.S. monetary stimulus tapering. Economists said in e-mailed interviews with Yonhap News Agency that the Fed\'s tapering risks would have limited impacts on South Korea as the sustained current account surplus, a pile-up in the FX reserve and a fall in short-term foreign debt serve as buffer against external shocks. \"Investors are rewarding Korea with safe haven status, now that credit fundamentals have much improved. Short-term external debt, FX reserves, fiscal deficit metrics are stronger,\" said Wai Ho Leong, an economist at Barclays Capital. \"I am confident there will be no repeat of 1997 for Korea.\" Juliana Lee, a senior economist at Deutsche Bank, said that South Korea is \"weathering the storm well due to its improved fundamentals.\" Concerns over foreign capital flights from emerging nations are growing as market players are betting that the U.S. Federal Reserve will decide to begin tapering its bond-buying stimulus program at its policy meeting slated for Sept. 17-18. South Korea has traumatic experience of undergoing massive fund outflows and subsequent sharp currency weakness in 1997 and 2008. In 1998, the Korean economy contracted 5.7 percent and it grew 0.3 percent in 2009, hit by the 2008 global financial crisis. Mindful of such risks, Korea has boosted its FX reserves to over US$330 billion and taken a set of steps to curb excessive cross-border capital flows such as restriction on banks\' handling of forward contracts. It posted a current account surplus for the 18th straight month in July and the short-term external debt declined to $119.6 billion as of end-June, the lowest in over six years. Foreigners remained buyers of a net 1.5 trillion won ($1.37 billion) worth of local stocks in August, the second straight month of net purchases, according to the financial watchdog. Bond funds posted an outflow last month, but excluding the value of maturing debt, overseas investors were still net buyers of Seoul bonds. \"Korea has sufficient buffers against the consequences of rising U.S. yields and the Fed\'s tapering of quantitative easing,\" said Terence Tayseop Lim, representative director at Macquarie Securities Korea. \"Korea is well positioned due to the better scores on inflation, output gap, the current account and funds flow. The impact will be limited.\"    Kang Jae-joon, head of research at Franklin Templeton Korea, echoed similar views. He said that as the U.S. and the eurozone are on the recovery and the Chinese economy is seen as stabilizing, jitters in smaller emerging nations are not likely to spur big troubles for the export-dependent Korean economy. \"Investors may even reallocate more risk to the stronger economies. Korea is likely to be one of the winners,\" Leong said. But experts also warned against any complacency as Korea is not fully immune to volatile foreign capital flows due to its high market openness. \"The Korean government may have to prepare a probable negative spill-over impact from other peripheral emerging countries where we cannot rule out a possibility of currency crisis,\" said John Park, chief investment officer at Baring Asset Management Korea. Sohn Sung-won, a professor at the California State University, noted that the Fed\'s tapering will lead Korea\'s market rates to further rise, which could weigh on the local economy. \"I think that capital outflows could occur to some degree, possibly raising currency and price volatility... The current situation is different from what it was in 1997 or 2008. But authorities should prepare for possible negative scenarios,\" he added.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today south korea earns \safe haven status\ from foreign investors Arab Today, arab today south korea earns \safe haven status\ from foreign investors

 



Arab Today, arab today
Arab Today, arab today Mohamed Bahari prepares new collection for spring 2017

GMT 06:15 2017 Monday ,27 February

Mohamed Bahari prepares new collection for spring 2017
Arab Today, arab today 17.4 million tourists visit UAE in 2016

GMT 00:47 2017 Monday ,27 February

17.4 million tourists visit UAE in 2016
Arab Today, arab today Sheds light on major steps in 12-year career

GMT 06:07 2017 Monday ,27 February

Sheds light on major steps in 12-year career
Arab Today, arab today UN envoy sets out framework

GMT 07:25 2017 Monday ,27 February

UN envoy sets out framework
Arab Today, arab today Ayat Abaza says state TV presented major stars

GMT 03:52 2017 Sunday ,26 February

Ayat Abaza says state TV presented major stars

GMT 06:01 2017 Sunday ,26 February

BRIC funds see inflows amid emerging equity boom

GMT 05:43 2017 Sunday ,26 February

Al-Gergawi quits Dubai Holding to focus on govt role

GMT 05:14 2017 Sunday ,26 February

Oil prices to average $50-$70 through 2022

GMT 14:44 2017 Saturday ,25 February

China overtakes US as Germany’s top trade partner

GMT 05:53 2017 Saturday ,25 February

Global sovereign debt to hit new all-time high

GMT 05:17 2017 Saturday ,25 February

Oil world cautious on Trump’s next move

GMT 09:59 2017 Friday ,24 February

Baidu revenue slips anew amid ad clampdown
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Penguins in the age of dinos

GMT 11:44 2017 Saturday ,25 February

Penguins in the age of dinos
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today 'Constructive' Vauxhall talk with union

GMT 08:54 2017 Saturday ,25 February

'Constructive' Vauxhall talk with union
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Reasons for the delay 'On the Stairs of Servants'

GMT 06:42 2017 Saturday ,25 February

Reasons for the delay 'On the Stairs of Servants'
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage

GMT 07:23 2017 Friday ,24 February

Ola Ghanem hopes to work with M.Ramadan

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years

GMT 18:23 2017 Friday ,24 February

Fadi explains secrets of  Nancy Ajram's newlook

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"

GMT 10:51 2017 Saturday ,25 February

Pigs with edited genes show resistance

GMT 14:04 2017 Friday ,24 February

Messi visit will contribute in tourism

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 01:04 2017 Tuesday ,28 February

Nokia 3310 is back — and so is 'Snake'

GMT 22:42 2017 Thursday ,23 February

Nasima Gamei revives heritage in jewelries
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday