South Korea to Maintain Stimulus Measures

South Korea's finance minister said on Wednesday that the country would continue with stimulative policy measures until the economy was able to power itself.

Korea, Korean Flag
Korea, Korean Flag

"(A) stimulative macroeconomic policy stance should be maintained until the economy gains self-growth momentum," Finance Minister Yoon Jeung-hyun said at a meeting with analysts and policy makers.

His comments came a day after the central bank held interest rates steady at record-low 2.00 percent for a third straight month following six reductions, and signaled that it would keep the rates low enough to support the economy for the foreseeable future.

Yoon echoed the Bank of Korea governor's cautious outlook, saying that although the economic decline had abated markedly, a recovery was likely to come slowly.

He pointed to lingering uncertainties in domestic financial markets and global investors still grappling with the troubles at auto giant General Motors and unstable Eastern European markets.

"The fears over the financial and foreign exchange markets have eased but there are still uncertainties underneath," Yoon said. He added that the won's recent rise could undercut the profitability of many local exporters.

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The won has soared nearly 30 percent to the strongest level against the dollar in about seven months since hitting an 11-year low in early March. Separately, a vice finance minister warned on Wednesday that the government would take action if the won rose too fast.