Korea unlikely to be removed this time from US currency list: minister

21-Oct-2019 Intellasia | KoreaTimes | 6:02 AM Print This Post

South Korean Finance minister Hong Nam-ki said Friday he believes it is unlikely Seoul will be removed from an upcoming list of countries the United States monitors for currency practices.

Hong made the remark to reporters in Washington as the US Treasury Department is expected to release its next report on the currency practices of US trading partners in the coming days.

In the last report in May, South Korea was kept on a list of countries to monitor, but the Treasury indicated it could be removed if it continued to meet only one of the three criteria for a currency manipulator in the ensuing six-month period.

“It is our wish to be removed, but realistically, I got the impression that it won’t be easy this time,” the minister said, citing his meeting with US Treasury Secretary Steven Mnuchin on Thursday.

“The government will do its best,” he added.

Hong is in Washington for the Group of 20 finance ministers and central bank governors’ meeting, as well as meetings of the International Monetary Fund and the World Bank.

Mnuchin also expressed an interest in South Korea’s request to be exempted from any future US auto tariffs and said he would discuss the issue with the Commerce Department, Hong said.

US President Donald Trump is expected to decide next month whether to impose tariffs of up to 25 percent on imported autos and parts for reasons of national security as defined in Section 232 of the Trade Expansion Act.

South Korea has lobbied hard to win an exemption from the tariffs on the grounds that it made concessions on automobiles in the revised bilateral free trade deal that went into effect in January.

As for trade tensions with Japan, Hong explained South Korea’s position that Japan should remove its export controls on three materials critical to the production of semiconductors and flexible displays to Mnuchin.

“Trade conflicts (between Seoul and Tokyo) will have an impact on the global division system (which has underpinned co-prosperity of the global economy) and hurt global supply chains,” the minister said, calling for support from G-20 nations.

Relations between Seoul and Tokyo have deteriorated to their worst level in decades amid the trade dispute stemming from differences on their shared history.

Hong voiced hope that next week’s visit to Japan by prime minister Lee Nak-yon, as well as his planned meeting with Japanese prime minister Shinzo Abe, will help resolve the tensions before the end of the year and remove uncertainties for businesses preparing for next year.

In response to a slowdown in the global economy, the minister said governments need to adopt the “policy mix” recommended by the International Monetary Fund and the Organisation for Economic Cooperation and Development. The policy mix is the combination of a country’s monetary policy and fiscal policy.

He introduced Seoul’s efforts to ride out headwinds and support growth.

Together with monetary easing, the government plans to start expanding fiscal spending to support growth by executing some of its planned annual budget early next year.

This week, the Bank of Korea lowered its policy rate by a quarter percentage point to 1.25 percent. In August, South Korea announced a record 513.5 trillion-won (US$424 billion) budget for 2020, up 9.3 percent from a year earlier.



Category: Korea

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