Brazil"s Crisis Sinks Korean Stock Market

Financial markets are justifiably jittery on the news of the financial crisis in Brazil. Especially as it came at a time when worldwide financial markets were already vacillating.
But some experts believe it is not a panic situation. They are expecting that as G7 countries including the United States and Japan as well as the International Monetary Fund(IMF) are trying to mitigate the damage, the tumult will neither spread nor be prolonged.
On the 14th, in Korea's stock market, the KOSPI plunged by 28.61 points to close at 604.42.
For the day, in foreign exchange market, the value of the won against the U.S. dollar fell by 12 won, as the sentiment that U.S. dollars are a safe haven spread.
The government held a special meeting to propose countermeasure with officials from the Ministry of Finance and Economy, the Ministry of Industry, Commerce and Energy (MOICE) and the Bank of Korea in attendance.
MOICE already offered support to companies that export to Brazil which are now checking the aftermath of the financial crisis.
Korea exports to Brazil totaled 1.7 billion dollars last year including ships, cars and textiles and imports as much as 700 million dollars worth of products. Direct investment by Korean companies was accounted to be as much 140 million dollars last year.
Meanwhile, Francisco Ropez, the new president of Brazil's central bank, said on January 13, 'The devaluation of Brazil's currency, the real, due to the enlargement of the foreign exchange fluctuation level will ultimately enhance the flexibility of our exchange-rate system. There are no problems in servicing our foreign debts.'