South Korea - Start Controls Won Currency Exchange Rate.

Reporting SEOUL - The latest news of economic challenge, 'The South Korean government' announced the start to limit currency trading in the banking sector.

Transactions in banks and financial institutions 'south korea' which is bounded forward currency transactions, cross-currency swaps and currency non-deliverable forwards.

Reuters, Sunday, 13 June 2010, this step is intended to control short-term debt and fluctuations in the flow of funds so that it can suppress the economic risk.

The financial authorities 'south korea' fear a sharp decline in the won exchange rate, as long as world market turmoil caused by the debt crisis will negatively affect European Affairs of ginseng. 'South Korea' to stabilize the exchange rate and reduce overseas borrowing.

"This policy aims to reduce fluctuations in capital flows that could trigger a systemic risk to the state and not the intervention to a specific value, said Minister of Finance, financial regulators, and 'South Korean Central Bank'," in a joint statement.

He added that countries should prepare a special rescue tools for critical instruments such as the high volatility in capital flows.

Restrictions should be implemented in October, and is applicable to local and foreign financial institutions. But official data from Government 'south korea' indicates a foreign bank must immediately implement this new rule.

These new rules will reduce the forward and futures transactions by bank and non-bank institutions in the 'south korea' by 50 percent. Capital requirements for foreign banks increased 240 per cent of bank capital.

As a result, local banks' capital requirements is only one thirtieth of a foreign bank. Currently, foreign bank derivative transactions reached 300 percent of their capital, while local banks have visited only 15.6 persen.Terimakasih (otofinanceinfo)