The Finance Ministry and the Bank of Korea announced in a joint statement that one way to stem the declining won would be to use the country's foreign-exchange reserves. Korea ranked sixth globally in foreign-exchange holdings with over US$258 billion as of the end of last month.

A weaker won has helped shore up Korea's economy, which relies heavily on exports, but experts say that has inadvertently pushed the country's inflation rate up amid soaring oil and commodities prices.

News of the government's renewed plans for intervention comes after the won fell more than 10 percent against the greenback since the start of this year.

Korea, which has Asia's second-worst performing currency, dumped about $1.8 billion in May alone in a bid to strengthen the falling won.

The Korean business community, meanwhile, vowed to reduce oil consumption by up to 1.8 billion liters every year until 2012, which is expected to cut W8.4 trillion (US$1=W1,043) in spending.

In a ceremony hosted by the Ministry of Knowledge Economy, CEOs from various industries including petrochemicals, automobiles and shipbuilding promised to take part in the conservation campaign.

Automakers which planned to roll out more fuel-efficient LPG-powered and hybrid cars by late 2009 are expected to readjust their production schedules to early next year.

Arirang News