Senior South Korean finance officials say they are getting ready for any eventuality in the deepening financial crisis. But they say the lessons they learned 10 years ago, combined with an ample supply of cash, are likely to shield the country from the worst of the credit crunch's effects. VOA's Kurt Achin reports from Seoul.
South Korean President Lee Myung-bak sought to assure his country it is unlikely to suffer the same degree of financial turmoil going on in the United States and Europe.
South Korea's currency, the won, dropped to a 10-year low against the dollar. U.S. and global investors are hoarding dollars amid financial instability, driving the dollar's value up and further constricting the short-term credit lines that help global business flow.
President Lee points out that South Korea and its neighbors have nearly $2 trillion in foreign reserves. In coming weeks, he is expected to discuss ways of cooperating with Japan and China to use those reserves as a shield against the worsening credit crunch.
South Korean Deputy Minister of Strategy and Finance, Shin Je-Yoon, told international reporters a joint-government task force is ready for any financial eventuality.
"Nobody knows what is happening in the future. We already prepared all scenarios, from optimistic to pessimistic," he said.
Asian stock markets, including the main indexes in Seoul, have plummeted in recent days, mirroring the market turmoil on Wall Street. Seoul has made about $15 billion of cash available to lenders, and Shin says it is willing to do more.
"These days the market is very abnormal ... So, we need to implement pre-emptive measures ... if necessary, we are ready to put more money into this market."
Shin says trade conditions should also help South Korea get through the crisis. The country has a trade deficit of more than $12 billion - mainly due to its dependence on imported oil, but Shin says he expects a surplus later this year.
