US Interest Rate Cut Not Benifit to Exports
09/30
The recent interest rate cut by the U.S. Federal Reserve Board (FRB) is not likely to help the nation increase exports into the United States,trade and economic experts said yesterday.
The FRB's move is expected to have only the slight impact of curbing the export decrease rate. In addition, this effect will materialize only after the second quarter of next year.
Lee Hahn-koo, president of Daewoo Economic Research Institute (DERI) said, ''The announcement to lower the interest rate is likely to lead to a drop in market interest rates, albeit a minor one. But I don't believe the drop in the interest rate by 0.5 percent will help the United States revitalize it sagging economy.''
''The nation (Korea) is unlikely to see a great increase in shipments into the United States, whereas the rate cut is forecast to help it mitigate the decline trend. And the easing of the decrease rate will be realized from the second quarter of next year,'' he added.
Chung Soon-won, executive director of Hyundai Research Institute, noting that the cut is designed to ease the worldwide economic slowdown rather than buoy up the economy, forecast that it would not significantly help the nation in its bid to expand its exports into the United States.
Concerning the possible inflow of capital into Asian nations, including Korea, he has a similarly negative outlook, saying, ''In view of the situation facing the Asian nations, a major capital shift is unlikely to occur.''
Cho Seung-je, director of the Korea International Trade Association (KITA), said, ''The steady decrease in shipments into the United States from June this year has mainly been attributed to the weakening price competitiveness of Korean products rather than to U.S.-related factors.''
He noted that prospects for exports into the U.S. market are not so bright when considering the drop in the price of semiconductors, the deadlock in the bidding for Kia Motors and the saturated U.S. market.
Chung Kyu-cho, vice president of Hyundai Corporation said, ''It is more important for the national enterprises to focus on Southeast Asian markets rather than the U.S. market. The positive impact of the interest rate cut remains to be seen.''
The nation's exports into the United States reached $15.87 billion as of July 20, mainly boosted by the fall in the value of Korean won. But shipments began to decrease from June. |
