South Korea has sufficient provisions in place to guard against U.S. Federal Reserve rate hikes, but the same cannot be said of a slowdown in neighboring China, admits finance minister Choi Kyung Hwan.
"We have many preps in place for the pending rate hike from the U.S.," Choi told CNBC on the sidelines of an International Monetary Fund meeting (IMF) in Lima, Peru. "We do not anticipate any abrupt shock to our economy."
South Korea's buffers include high currency reserves and a strong current account position, he said.
In the first half of the year, Asia's fourth largest economy posted a current account surplus of $52.4 billion, up 33 per cent on year and the highest for any six-month period, driven by a collapse in the value of energy imports. Current account measures the flow of goods, services and investments into and out of the country.
The country isn't totally immune to external headwinds, however.
"China represents a key opportunity for us at the same time it also represents a threat as well," Choi said.