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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Henry Volquardsen who wrote (1439)	3/26/1999 5:44:00 PM
From: Paul Berliner	Read Replies (1) of 3536

Another on currencies but on a different (jovial?) different tangent: afr.com.au Koreans miss the big won By Jennifer Veale, Seoul South Korea has decided against issuing large-denomination cash notes on fears of fanning inflation and unwittingly padding the pockets of corrupt officials. The move condemns Koreans to carry book-size wads of cash for big purchases as the country's largest denomination is now only 10,000 won - little more than $13. Though this may suffice for consumers in some of Asia's less expensive capitals, it is woefully inadequate in Seoul which is one of the world's most expensive cities. The 10,000 won note packed some clout in the early days of rapid industrialisation after the 1950-1953 Korean War but it is now hardly enough for two coffees at a Seoul cafe. For years, government agencies considered introducing a 100,000 won bill to bring the monetary standard up to par with the cost of living and reduce consumer dependence on promissory notes and credit cards. But the Ministry of Finance vetoed the idea on the grounds that it could fan inflation as the still-brittle economy drags itself to its feet. The Government used credit card purchases and promissory notes to trace graft money in its crackdown on public corruption. It fears that if consumers dispense with these purchasing tools it will have a tougher time combating graft. But the banking executives are not so impressed with this line of thinking, pointing out that Korea could save more than $1 billion a year if consumers didn't have to rely so much on promissory notes to avoid unsightly bulges in their wallets. The Government is wary of fuelling public anger at corrupt bureaucrats by taking a measure that might fan corruption by helping corrupt civil servants conceal their dirty money. Since taking office a little more than a year ago, President Kim Dae-Jung has launched extensive crackdowns on corrupt civil servants. --------------------------------------------------------------------------------

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