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Korea has issued US$3 billion worth of forex stabilization bonds, no mean feat given that it came during the global financial crisis compounded by uncertainties due to North Korea's rocket launch. Experts say the issuance proves the soundness of Korea's economy and alleviate jitters among investors.
Korea has also been able to erase the bad memory of the failed forex stabilization bond issuance in September last year. There are rumors that the government, which originally intended to issue between $1 billion to $2 billion in bonds, raised the amount to $3 billion due to demand for up to $8 billion by investors.
Just a month ago, British newspapers and international credit ratings agencies fanned fears of a "March crisis" in the Korean economy, citing worries of a dollar shortage. The Financial Times and the Economist said the amount of Korea¡¯s short-term foreign debt was far larger than the country's dollar reserves and took the lead in sounding the alarm. On Mar. 12, British credit ratings agency Fitch caused an uproar after it issued a report claiming that Korean banks could see their assets drop by W42 trillion (US$1=W1,323) by the end of next year.
But the bonds issuance is likely to put those fears to rest. Instead, the U.K. was humiliated last month when it failed to find buyers for 1.75 billion pounds (around W3.3 trillion) worth of 40-year sovereign bonds. It was the first time in 14 years that it failed to find buyers for its sovereign bonds. Experts say the U.K.'s soaring fiscal deficit, which has grown eight-fold since last year, was the main reason behind the lack of interested buyers.
Billionaire U.S. investor George Soros said the U.K. may have to turn to the International Monetary Fund for emergency aid if its financial system keeps collapsing.
(englishnews@chosun.com )
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