Jun 16, 2005

S. Korea Follows through with Asset Diversification

From the Korea Herald:
The government yesterday unveiled measures to induce overseas investment by local firms and individuals, a major shift in its foreign exchange policy that once strictly restricted capital outflow.

The plan drafted by the Ministry of Finance and Economy is aimed at removing regulations on Koreans buying foreign real estate and other overseas assets.
The finance ministry expects the new measures to create outflows of between $1 billion and $1.5 billion per year. Korea has had a net inflow of foreign currencies worth about $25 billion on average every year since the 1997-1998 Asian financial crisis, according to the finance ministry. The central bank expects the net inflow to reach about $20 billion this year. In a separate move, the Bank of Korea yesterday was supposed to unveil a plan that would allow part of its foreign exchange reserves to be lent to overseas investors.

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