Trading industry calls for measures to keep won from rising too fast
Leaders of domestic trading businesses yesterday called on the government to take steps to stabilize the rapidly rising value of the Korean won against the U.S. dollar.
Kim Jae-chul, chairman of the Korea International Trade Association (KITA), and other industry leaders, held an emergency meeting to discuss measures to cope with the won's sharp appreciation. After the meeting, they called on Minister of Commerce, Industry and Energy Chung Duck-koo to press the government to stabilize the foreign currency market.
It was the first time this year that leaders of the trading industry officially called for government steps to stabilize the foreign exchange rate.
At the meeting, the industry representatives stressed that the government should not allow the won's continued appreciation, which stems from a liquidity-driven boom of the stock market.
"The won's galloping rise in value will seriously erode Korean exporters' profitability and competitiveness," a KITA official said, adding that it would also hamper the possibility of attaining the trade surplus target next year.
The ministry said it will closely monitor the movements of the foreign exchange rate and address difficulties facing exporters.
Meanwhile, the won's unexpected strength is posing domestic general trading companies the difficult question of how to adjust the exchange rate for business operations for next year.
Unless they revise the rates forecast for next year, firm's will inevitably face disparity in their business plans, business sources said yesterday.
Samsung Corp., based on a forecast by the Samsung Economic Research Institute and the stable domestic foreign exchange market, predicted the dollar will remain around the 1,100-won range next year. The won's upward trend, as indicated by the faster-than-expected business recovery and sharp rise in inflow of foreign stock funds, however, prompted Samsung Corp. to revise its exchange rate forecast.
The rapid strengthening of the won also caught Hyundai Corp. by surprise as it established its business plan for next year on the basis of an exchange rate forecast of 1,200 won to the dollar during the first half and 1,100 won during the latter half.
"As things stand, we will probably have to review the exchange rate forecast," a Hyundai source said.
LG International is likely to revise its forecast for next year to 1,150 won during the first quarter, 1,140 won during the second, 1,125 won during the third and 1,100 won during the fourth for an average rate of 1,125 won for all of next year.
SK Global is also trying to figure out how to readjust its forecast of 1,180 won for the first quarter and 1,100 won for the latter half of next year.
Updated: 12/09/1999 |
