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The Ministry of Strategy and Finance (MOSF) announced that foreign investment banks forecast uncertainties in Korea’s financial and foreign exchange markets to be low despite financial uncertainties in emerging countries.
According to the MOSF last week, foreign investment banks evaluate Korea’s economic fundamentals to be sound based on a current account surplus, fiscal sustainability and an improved structure of foreign loans.
BNP Paribas forecast that the Korean won is strong although values of Asian currencies are fluctuating due to the United States’ reduced quantitative easing. It also added that Korea’s financial soundness and foreign reserves are most favorable among Organisation for Economic Co-operation and Development member countries.
Goldman Sachs also forecast that the possibility of a drop in the Korean won is low compared to the currencies of India, Australia and Indonesia, based on its analysis of currency fluctuations in major Asian countries early this month.
Barclays also predicted that the Korean stock market will bring better performance compared to other Asian markets in the second half of the year.
Deutsche Bank, JP Morgan and Morgan Stanley also gave high scores on stability in the Korean financial market.
However, the Korean government noted that it will reinforce monitoring activities against a possibility of increased volatility in the Korean financial market.
The government is also keeping a keen eye on Korea’s financial market as there are factors that can impact the international financial market.
An MOSF official noted that the ministry will strengthen monitoring activities with a focus on key international events and a previously established contingency plan will be initiated when market uncertainties break out.
Source: Newsis (Aug. 22, 2013)
** This article was translated from the Korean.