South Korea’s Lee Says Nation Has Means to Stabilize Currency

By Kevin Cho

March 7 (Bloomberg) -- South Korea has the means to stabilize its currency, President Lee Myung Bak said today.

“Fundamentally, the government believes there are factors to which the won can be stabilized,” Lee told South Korean businessmen in Indonesia, according to a pool report on the presidential office’s Web site. “Korea, Japan and China are maintaining dialogue to help each other when things are difficult,” the report cited Lee as saying, without elaboration.

Korea’s won has declined 39 percent against the U.S. dollar in the past 12 months, the biggest drop among the 10 most-traded Asian currencies outside Japan, amid concern global financial turmoil may leave the nation’s banks short of funds needed to service overseas debt.

South Korea expanded currency swap arrangements with China and Japan in December in an effort to ensure financial stability in Asia. South Korea and Japan increased an existing won-yen arrangement to $20 billion from $3 billion.

To contact the reporter on this story: Kevin Cho in Seoul at kcho2@bloomberg.net