The head of South Korea’s financial regulatory agency refuted the statement that the local markets may experience crisis due to capital outflow from the country this Monday. According to Jun Kwang-woo the chairman of the Financial Services Commission the country is quite ready to experience any increase in USD demand.
The South Korean currency decreased throughout previous week caused by the possible shift of foreigners’ profits (that are about $7 billion) out of the country. Furthermore there are also fears of the investors supposing that the outflow of the capital may be increased due to the growing USD demand from the local banks that is explained by the necessity to pay back short-term external debt.
However finance minister and the head of the central bank that have announced that there won’t be the worst-case scenario of capital outflow and thus they have also refuted such ideas.
The lowest point of the national currency – won throughout the week was at the level of 4-years low in relation to the USD. However after the foreign intervention with the aim to provide some support for the currency the won grew a bit.
Furthermore, due to Jun Kwang-woo the decision taken by the HSBC Holdings to purchase 51% stake of the Korea Exchange Bank will contribute to the growth of the confidence of the traders to the deals in the country. He has also added that local stock markets possessed a great field for profits because of their low valuations and perfect outlook for the business of local companies.