Reveals This During Appearance on Sampro TV
Koo Yoonchul, Deputy Prime Minister and Minister of Economy and Finance, addressed the continued rise in the won-dollar exchange rate, stating, "We will understand why capital is flowing overseas and make structural improvements."
In a video released on December 18 through the YouTube channel Sampro TV, Deputy Prime Minister Koo explained, "The current exchange rate is the result of high demand in the market," adding, "There is also a perception that the domestic stock market is relatively less attractive."
Deputy Prime Minister Koo announced plans to enhance the appeal of Korea's capital market by fostering venture companies and industries capable of generating higher returns than overseas investments, providing incentives for long-term stock investments, and protecting shareholder interests.
He stated, "I do not intend to blame or hold individual investors responsible for seeking better investment opportunities abroad," and assessed, "If policies to increase the attractiveness of the Korean market become visible, the exchange rate will also stabilize."
He further pointed out, "Looking at our situation, the current account surplus through November is about 90 billion dollars, but at the same time, the amount of capital flowing overseas is about 150 billion dollars," explaining that "approximately 60 billion dollars is being drawn out," as a background for the decline in the value of the won.
Deputy Prime Minister Koo noted, "In this process, the book value of overseas assets measured in won increases, but if the exchange rate falls in the future, foreign exchange losses may occur."
Regarding the four-party consultative body formed by the Ministry of Economy and Finance, Ministry of Health and Welfare, National Pension Service, and the Bank of Korea, which is exploring a new framework, he clarified, "This does not mean that we intend to manage the exchange rate by utilizing National Pension Service assets."
Deputy Prime Minister Koo explained, "The aim is not to introduce new rules, but rather to share awareness of foreign exchange hedging, considering the possibility of a future decline in the exchange rate amid the current high levels," adding, "Instead of focusing solely on valuation gains from the short-term rise in the exchange rate, we aim to achieve overall stable management by adjusting the timing of capital inflows and outflows and investment periods."
Meanwhile, the Sampro TV episode featuring Deputy Prime Minister Koo was recorded on December 12.
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