‘No Danger of Second Financial Crisis’ Credit Raters, IMF Dismiss Korean Crisis Fears Malicious Rumors: From U.S. Beef to Financial Markets Government’s Crisis Handling Skills Have not Improved U.S. Dollar Shows Signs of Recovery Weak Won Begins to Tell in People’s Pockets Per-Capita GNI Likely to Drop Below $20,000 This Year Korea ‘Already a Net Debtor Nation’ Can the Government Win the Forex Game? Warnings Sounded Over Financial Instability Rumors of September Crisis Rattle Markets September Crisis Jitters Subside September Crisis Scenario Laid to Rest

The predictions said this September crisis would lead to a second financial crisis for the country, creating jitters in the market. But the government did not responded to the speculation firmly enough, merely dismissing them as "rumors" and "hypotheses." The psychological effect on foreign exchange market players and investors was considerable last month, shaking the exchange rates, interest rates and stock prices. Despite press reports that the fears had been exaggerated, the jitters persisted.

Panic seized the financial market on the first day of September, when the won tumbled W27 against the U.S. dollar from the previous day's close and the main KOSPI index dropped by 59 points.

The Times of London picked that day to write, "South Korea heads for black September as problems pile up for the ailing won." Only then did the government start to try and make its voice heard.

The Strategy and Finance Ministry in an urgent briefing about the Times story on Tuesday distributed a press release that quoted Deputy Finance Minister Shin Je-yoon as saying, "There is no problem as far as foreign exchange liquidity is concerned, and there is little possibility of foreign debts rising in comparison with the financial crisis" in the late 1990s.

In a snap economic and financial review meeting on Tuesday morning, the government warned, "The government is concerned about excessive jitters in the foreign exchange market” and promised to deal “resolutely” with the panic.

A securities firm executive said, "The government has failed to placate people's sense of unease with its slow responses. It should have actively presented reasons to dismiss rumors of a September crisis and cracked down resolutely on those who spread the rumors."

(englishnews@chosun.com )