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Home > mk Business News >> Economy 프린트 이메일 전송 리스트
Overly open S. Korean capital market calls for increasing FX reserves, currency swap: economists
By Jun Buhm-joo, Kim Je-rim
2013.06.30 18:20:42 | 2013.06.30 18:32:11

[Overly open S. Korean capital market calls for increasing FX reserves, currency swap: economists] 기사의 본문 이미지

Prominent South Korean economists said the nation’s capital market is overly open, requiring prompt actions. The economists sent a warning that major economies worldwide are forecast to taper quantitative easing, raising a likelihood of a rapid capital outflow from Korea.

To be prepared for their exit strategy, Korea needs to gradually expand its foreign exchange reserves and currency swaps, and levy a capital transaction tax as an intermediary measure when foreign capital is likely to flee Korea, the economists said.

According to Maeil Business Newspaper’s survey of the 20 economists who participated in a discussion panel convened by the National Research Council for Economics, Humanities and Social Sciences (NRCS), 14 experts deemed the Korean capital market is excessively open to foreign investors. Only five economists said the market is open at an appropriate level.

The economists, most of whom advocate free market, generally argue regulation should be minimized to allow a free flow of capital in and out of borders in the international market. Nonetheless, 70 percent of the economists said the Korean market is too exposed to foreigners, portending a massive flee of foreign investors’ funds to US dollar-denominated assets and subsequent breakdown of the Korean economy.

The Korean stock and bond markets are dubbed the “ATM of global money,” as inflow and outflow of capital is easier and the markets have attracted large funds relative to the size of the nation’s economy. Indeed, foreign capital that can enter or leave the Korean market anytime it wants accounts for 83.6 percent of the nation’s total stock and bond investment funds, whereas the average ratio among 40 emerging markets stands at 16.4 percent.

Park Chin-keun, Chairperson of the NRCS, said “the Korean capital market pales in comparison to the global market in terms of scale, yet is exposed to global uncertainties and related risks without a safe net in place.”

The surveyed economists pointed out Korea’s need to further increase foreign currency reserves.

Kim Jung-sik, an international finance professor at School of Economics of Yonsei University, said “as US Fed chairman Ben Bernanke’s comment sent a shockwave throughout the world, [Korea] should enlarge foreign exchange reserves from the current $328 billion to around $400 billion.” The professor said “the currency reserves needs to come to $405 billion to be stable, combining $140 billion equal to the nation’s imports for three months, another $140 billion, 30 percent of foreign investments in stocks and bonds, and $125 billion equivalent to short-term external debt.”

The Korean economy, meanwhile, also has approached the entry point of a long-term deflation, the economists said. They were particularly concerned about the inflation rate, which has remained below two percent for the eight month despite the lack of the Bank of Korea (BOK)’s move to stabilize consumer prices.

The inflation falls far below the BOK’s policy goal between 2.5 to 3.5 percent, hinting the Korean economic growth and employment growth are sluggish.

[ⓒ Maeil Business Newspaper &, All rights reserved]

Korean View
한국 간판 경제학자 20명의 경고
한국 경제 디플레 초기진입
자본 과잉 유출입도 막아야

대한민국 대표 경제학자들은 우리 자본시장이 외국인에게 과도하게 개방돼 있다며 전향적인 자세로 대비책을 마련해야 한다고 촉구했다. 특히 선진국들의 양적완화 축소가 예상되면서 국내 자본시장에서 급격한 자본 유출이 일어날 가능성을 경고한 셈이다. 경제학자들은 외환보유액과 통화스왑을 점진적으로 늘려가고, 심각한 외화 유출 위기가 감지되면 과도기적으로 자본거래세를 매기는 등의 적극적인 위기 대처가 필요하다고 조언했다.

매일경제신문이 지난달 28일 경제ㆍ인문사회연구회(이하 경사연) 경제부흥 종합토론회에 참석한 국..

경제용어사전 프린트 이메일 전송 리스트

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