S Korean gov't may halt capital injection into banks

Special Report: Global Financial Crisis

SEOUL, May 7 (Xinhua) -- The South Korean government may stop injecting capital into the local banking system with credit crunch showing signs of improvement, local media reported Thursday.

According to South Korean financial authorities, local banks are capable of boosting their own capital by issuing bonds, new shares, or hybrid securities with progress in funding conditions, South Korea's Korea Herald reported.

Bank officials also said that they are able to raise their capital on their own, thanks to better-than-expected earnings in the first quarter, as well as improvement of Bank of International Settlements capital ratios, according to the Korea Herald.

The management committee of the recapitalization fund late last month started a review to see whether any of local banks that had previously requested for a capital injection, which would be completed by the end of this week, the media said.

"Compared to the situation during the first-phase injection earlier in the year, market conditions have greatly improved and the demand for capital injection has shrank," an official from the fund management committee said.

China injects $38 bln into Asian crisis fund

Special
Report: Global Financial Crisis

BEIJING,May 4-- China, Japan and South Korea Sunday finalized
details of an emergency 120 billion U.S. dollars liquidity fund to help 13 Asian
economies counter the global economic downturn.

The three nations will contribute on a 2:2:1 ratio - 38.4 billion U.S.
dollars from China and Japan and 19.2 billion U.S. dollars from South Korea -
making up 80 percent of the fund, known as the Chiang Mai Initiative.

Chinese Finance Minister Xie Xuren
attends a joint press conference of finance ministers of the Association
of Southeast Asian Nations, China, Japan and South Korea (ASEAN+3), in
Bali, Indonesia, May 3, 2009. The ASEAN+3 finance ministers reached on
Sunday the agreement on all main components of regional reserve pool, and
will implement it before the end of this year. (Xinhua/Yue
Yuewei)
Photo
Gallery

Japan has also launched a separate scheme to supply up to 6 trillion yen
(61.5 billion U.S. dollars) to support nations hit by the economic crisis.

Both announcements were made on the Indonesian island of Bali, on the
sidelines of the Asian Development Bank's (ADB) annual meeting.

South Korean Minister of Finance Yoon Jeung-hyun told reporters after a
meeting with counterparts from China and Japan that Beijing and Tokyo would each
contribute 32 percent to the regional initiative.

Chinese Finance Minister Xie Xuren (L)
poses for a group photo with his Japanese counterpart Kaoru Yosano (C) and
his South Korean counterpart Yoon Jeung-hyun before their meeting in Bali,
Indonesia, on May 3, 2009. (Xinhua Photo)
Photo Gallery

South Korea would provide 16 percent, while the rest would come from the
10-member Association of South East Asian Nations (ASEAN), he said.

The fund will give emergency balance of payments support to any country
experiencing the kind of capital flight that marked the Asian financial crisis
of 1997-98.

"The three countries have reached an agreement, recognizing the importance
of our cooperation in the region," said Yoon.

The deal between the key players over what would be the region's first
anti-crisis fund makes it likely all countries involved would conclude
negotiations on the initiative by the end of the day. ASEAN includes Brunei,
Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore,
Thailand and Vietnam.

ADB lending

The ADB also plans to counter the crisis by ramping up lending to about 33
billion U.S. dollars over the next two years, almost a 50 percent increase on
2007-08. The Manila-based multilateral lender is funded by donations mainly from
Japan, the United States and European nations.

"The economic crisis in Asia has had a much more severe impact than
probably we have reckoned," said Rajat Nag, managing director-general of the
ADB.

Jong-Wha Lee, its acting chief economist, added economies in Asia had
probably hit the bottom of the crisis but a major recovery still hinged on the
revival of demand in developed nations, while officials suggested growing
efforts by Asian nations to protect themselves will complement the role played
by the International Monetary Fund (IMF) in combating the global recession.

"We are seeing a greater multi-lateralisation and expansion of the Chiang
Mai Initiative, which is not at the cost of the region's role in the IMF or the
IMF's role in the region," said Nag, who added: "If the region is going to be an
economic growth center it is appropriate it knows it has the resources and
reserves to stand on its own feet."

(Source: China Daily)

China, Japan, S Korea reach agreement
on distribution ratio of regional reserve pool

BALI, Indonesia, May 3 (Xinhua) -- China, Japan, and South
Korea have reached an agreement on the distribution ratio of a 120-billion-U.S.
dollar regional foreign-exchange reserve pool plan here on Sunday.

China, Japan, and South Korea will contribute to the pool
on a 2:2:1 ratio, namely 38.4 billion U.S. dollars from China and Japan each and
19.2 billion from South Korea. Full story

ASEAN countries agree on individual
contributions to regional reserve pool


PATTAYA, Thailand, April 9 (Xinhua) -- The ten
member countries of the Association of the South East Asian (ASEAN) Thursday
agreed on individual contributions to the foreign reserve pool, Thailand's
Finance Minister Korn Chativanij said in a joint press conference in beach
resort Pattaya in Thailand's central province of Chonburi.

The agreement was made during the 13th ASEAN Finance
Ministers' Meeting ahead of the ASEAN Plus Three summit, to be held April 10 to
12 in Pattaya. Full story

S Korea sees rise in business sentiment for May

Special Report:Global Financial Crisis

SEOUL, April 29 (Xinhua) -- South Korea's business sentiment index for May rose to a one-year high on hopes of economic recovery, an industry survey showed Wednesday.

The monthly business sentiment index, an indicator of companies' outlook for the coming month, hit 103.8 for May, compared with 86.7 for April, according to the survey by Federation of Korean Industries, the nation's top business lobby group.

The May figure is the first time in 11 months that the index rose above 100, which means companies with optimistic views on the economy exceed those with pessimistic forecasts.

The rise in the index comes as corporate earnings are better than earlier expected, the federation said.

S Korea's current account surplus rises to record high in March

SEOUL, April 29 (Xinhua) -- South Korea's current account surplus marked a record high in March thanks to a great leap in the goods balance surplus, the central bank said Wednesday.

The current account surplus reached 6.65 billion U.S. dollars last month, sharply up from 3.56 billion U.S. dollars in February, according to a report by the Bank of Korea (BOK).

The March figure stands at the largest level since January 1980 when the BOK started compiling related data.

The record surplus can be attributed to a jump in the goods balance surplus, according to the BOK.

The goods balance marked a surplus of 6.98 billion U.S. dollars in March, more than doubling from the previous month when the figure hit 3.11 billion U.S. dollars.

The increase in the goods balance came as an on-year fall of 35.8 percent in imports exceeded that of 17.8 percent in exports, the BOK said.

Meanwhile, the service account and the income account stood in the negative territory in March, with a deficit of 645.7 million U.S. dollars and 215.7 million U.S. dollars, respectively.

The capital account posted a net outflow of 2.18 billion U.S. dollars last month, close to a 2.98 billion-U.S. dollar outflow a month earlier.

As the trade surplus is expected to keep moving upward, reaching around 4 to 5 billion U.S. dollars for April, the country's current account surplus may hit about 3 billion U.S. dollars for the month, a high official at the BOK told a press conference.