Korea strongly reacted to the U.S. QE2 hours after the U.S. Fed’s announcement of Quantitative Easing policy. Korea is hosting the G20 summit next week.
From CNBC:
South Korea on Thursday issued its strongest warning in months that it was close to taking steps aimed at curbing fund inflows, saying it would "aggressively" consider taking such measures.
The statement came a day after the U.S. Federal Reserve said it would buy back $600 billion of government bonds, a move that economists say will likely unleash further substantial capital flows into emerging markets like South Korea.
"The government believes it needs to turn away from the perception that controlling capital flows is always bad and consider introducing measures to improve the macroeconomic prudence," the Ministry of Strategy and Finance said in a statement.
Policymakers including Finance Minister Yoon Jeung-hyun have repeatedly said that South Korea was studying steps to curb fund inflows but the country is hosting the Group of 20 summit next week and analysts say it will likely refrain from imposing strong controls at a time when it is urging not to manipulate markets.
http://www.cnbc.com/id/39998421
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