South Korea will consider easing its macroprudential measures in order to better cope with foreign capital outflows that could be caused by rate hikes in the United States and other advanced countries, the its finance minister said Saturday.
Since 2010, the Seoul government has implemented three sets of measures aimed at tightening regulations on excessive cross-border money flows, including curbing banks' foreign exchange forward positions and levying on banks' non-core foreign liabilities.
As the U.S and other advanced countries are now poised to raise borrowing costs after the end of their tapering on years-old quantitative easing, the government is busy preparing for possible capital outflows that could destabilize the domestic financial markets.
"The three sets of macroprudential measures are mostly aimed at coping with disruptions to our economy by excessive inflows of short-term money," Finance Minister Choi Kyung-hwan told a group of reporters here on the sidelines of the annual meeting of the International Monetary Fund.
"We will now review the measures in consideration of a possibility that disruptions could take place in the opposite direction," he added.
A finance ministry official explained later that there are some "tight" parts of macroprudential measures and Choi said that the government could look into those areas.
He also confirmed that he and the governor of the country's central bank have no differences in assessing the current economic situations, dismissing speculation that a cacophony between the two key policymakers could hamper stimulus efforts.
"I see no difference in a broad context," he said. "Decisions and determination could differ, but we agree that the current economic recovery trend is weaker than has been expected."(Yonhap)
