South Korea's currency crisis

The flight of capital from the Republic of Korea still continues. The value of the won keeps on declining in the foreign exchange markets and foreign banks are desperately trying to recover the money they loaned to South Korean banks.

It is necessary, first, to devalue the won and then to eliminate jitters in the financial market by means of funds made available by the IMF. It is also indispensable for the South Korean government to implement a policy of reducing its trade deficit by slowing down economic growth and overhauling an economic structure heavily dependent on industrial conglomerates.

The belt-tightening policy that the IMF demands in exchange for its loan would be unpopular in any country. But international assistance can be secured only by the South Korean government's commitment to enforcing such a policy. For the leader of South Korea to forget that principle only heightens the nervousness in the financial market.

-- Asahi Shimbun, Tokyo