Seoul sets money growth

Seoul sets money growth

SEOUL (AFP): South Korea will keep a tight lid on money supply
in 1995, with an annual growth target of 12-to-16 percent, the
central Bank of Korea (BOK) announced yesterday.

"The BOK will place top priority on stabilizing prices, so it
will try to maintain the level of money supply as low as
possible," said Kim Won-tai, head of the bank's monetary policy
department.

The Seoul bourse, which had been riding a two-day climb,
tumbled after the announcement, losing 9.52 points to close at
998.32.

In 1994 the money supply growth band had been set at 14-to-17
percent.

The policy announcement came after South Korea saw an
estimated 8.3 percent GNP growth rate in 1994, with predictions
the strong economic trend would continue through this year,
bringing concerns of overheating and steep price rises, the bank
said.

The tight monetary controls will be followed by interest rate
rises to further cool the economy by reducing corporate capital
investment and burgeoning consumer spending, it said.