Revived Korea to pay back $7.7b to IMF<\/p>\n
SEOUL (Reuters): South Korea said on Monday it planned to pay
\noff US$7.7 billion of its massive loan from the International
\nMonetary Fund by the end of this year as officials expressed
\nconcerns the country had a surfeit of dollars.<\/p>\n
President Kim Dae-jung and top economic officials painted a
\nrosy picture of an economy, badly wounded in Asia's currency and
\ndebt crisis, that was well on its way to recovery.<\/p>\n
\"We have paid $4.8 billion back to the IMF from which we had
\nborrowed $19 billion. We plan to repay an additional $7.7 billion
\nwithin this year,\" Kim Dae-jung said in a speech to a forum of
\nU.S. pension fund managers.<\/p>\n
The loans were part of a record $58.35 billion rescue package
\nthat the IMF arranged for Korea in December 1997.<\/p>\n
The aid money and a big infusion of both direct and portfolio
\nforeign investment has handed officials quite the opposite
\nproblem they faced little more than a year ago -- an appreciating
\ncurrency that threatens export competitiveness.<\/p>\n
The foreign exchange market has been awash in dollars and on
\nMonday officials tried to talk the won down.<\/p>\n
\"It is undesirable for the won to rise further,\" said an
\nofficial in a foreign exchange-related government office. \"The
\ngovernment is seeking strong counter-measures to control the
\nsupply and demand of the dollars,\" he said.<\/p>\n
The dollar was trading at around 1,223 won on Monday. At the
\nheight of the crisis at the end of 1997, the won was more than
\n1,900 to the dollar.<\/p>\n
A finance ministry official said state banks and corporations
\nwould soon be buying dollars to stem the won's rise.<\/p>\n
Many of those dollars have been brought in by foreign
\ninvestors, who helped key yet another rally on the Korea Stock
\nExchange. The Korea Composite Stock Index rose 2.22 points or
\n0.32 percent to close at 689.64 on Monday after briefly breaching
\nthe psychological 700 barrier.<\/p>\n
The index has risen 13 percent over the past eight sessions as
\nfalling interest rates draw foreign investors.<\/p>\n
The perceived need to keep the won from appreciating too fast
\nis one of the reasons the government is promptly repaying its
\ndollar-denominated IMF loan, analysts said.<\/p>\n
Another reason is to shore up its sovereign credit ratings,
\nwhich international ratings agencies have only recently upgraded
\nto just above investment grade.<\/p>\n
Thomson BankWatch said on Monday it has affirmed South Korea's
\nsovereign risk rating of \"BBB\", with a \"stable\" rating outlook.
\n\"There are some signs of economic recovery, more so than in
\nThailand, even though the process is still unfolding slowly,\" the
\ninternational ratings agency said in a statement.<\/p>",
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