Source: Xinhua

03-05-2009 17:59

SEOUL, March 5 (Xinhua) -- The South Korean government is ready to step into the currency market when the local currency suffers excessive fluctuations, South Korea's vice finance minister said Thursday.

"The government believes in the market principle that foreign exchange rates should be decided by economic fundamentals and supply and demand in the market," Vice Finance Minister Hur Kyung-wook said.

"However, we still believe that the government should take actions in a timely manner to soothe the market when it suffers speculative forces," he said.

The local financial market has recently been fueled by concerns over the nation's foreign currency condition as it becomes harder for local banks and companies to secure dollars to pay back their debts amid the global financial crisis.

Market jitters, especially, continue to escalate as questions have been raised over whether the South Korean government has enough amount of foreign reserve to defend its local currency.

Foreign media reports have recently cast suspicious views on South Korea's ability to pay back foreign debts.

The vice minister rejected market jitters, pointing at the 90 billion-U.S. dollar currency swap with the United States, Japan, and China.

"There is no need to worry about the foreign reserves falling below the 200 billion-U.S. dollar mark when taking action in the currency market," Hur said.

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Editor:Qin Yongjing