Asian nations fight currency depreciation
Raphael Minder | Friday, 27 June 2008
SOUTH Korean authorities last Tuesday sold as much as $1.0bn to shore up the won, according to currency traders in Seoul, underlining concerns in several Asian countries about weakening currencies in the face of oil-fuelled inflation.
With inflation last month at a seven-year high of 4.9 per cent, Lee Myung-bak, South Korea's president, told his cabinet to make price stability a priority.
South Korea's predicament is shared by other Asian nations that have seen an abrupt currency reversal compound inflationary pressures as oil and food prices remain near record highs. For the second time this month India last Tuesday raised its key lending rate, or repo rate, by 50 basis points to 8.5 per cent to cool inflation, which is running at a 13-year high.
Seoul is the world's fifth-largest crude oil importer, a dependency that is forcing Mr Lee's government to shelve an election-winning pledge to boost growth, in order to contain inflation.
Although the market inter
With inflation last month at a seven-year high of 4.9 per cent, Lee Myung-bak, South Korea's president, told his cabinet to make price stability a priority.
South Korea's predicament is shared by other Asian nations that have seen an abrupt currency reversal compound inflationary pressures as oil and food prices remain near record highs. For the second time this month India last Tuesday raised its key lending rate, or repo rate, by 50 basis points to 8.5 per cent to cool inflation, which is running at a 13-year high.
Seoul is the world's fifth-largest crude oil importer, a dependency that is forcing Mr Lee's government to shelve an election-winning pledge to boost growth, in order to contain inflation.
Although the market inter