Government to Put the Brakes on Won"s Rise

The government, on December 22, decided to directly intervene in the rising won's value in an attempt to lower it to create a better export environment.
The administration is eagerly trying to achieve a $40 billion trade surplus this year.
According to the Ministry of Commerce, Industry and Energy on December 22, exports turned to minus 0.7 percent last week which could be the trend in the future if the won continues to gain on the U.S. dollar.
The Ministry together with seven major business groups such as Samsung, Hyundai and Daewoo held an urgent meeting. Participants said, 'The won to dollar exchange rate in 1999 should be between the 1250-1300 level. If that does not occur we should reduce our projected export targets.'
All the participants emphasized, 'In the event the won reaches the 1,100 level early next year, Korea will not be able to compete with rivals Japan and Taiwan in terms of price in major markets. We desperately need the government's assistance.'
The government and the ruling National Congress for New Politics(NCNP) hinted they might actively intervene in defense of currency stability.
Kim Won Kil, assemblyman and chairman of The Policy Making Committee, commented, 'The current appreciation of the won is far too steep to maintain our export drive policy. I think the Bank of Korea should buy dollars to stop the dollar's depreciation.'
He added, ' The proper rate to achieve optimum export is the 1,300 level, I mean at the very minimum 1,250, and we should also strive to hold 50 billion dollars in foreign exchange reserves.'