South Korea's top central banker said Wednesday that global central bankers mostly agreed that current jitters in emerging markets are not likely to flare up into a major crisis although those countries could undergo difficulties in coping with turmoil.
Bank of Korea (BOK) Gov. Kim Choong-soo delivered remarks by the world's central bankers over rout in emerging markets including India and Indonesia after joining the annual Jackson Hole policy retreat held in Wyoming, U.S., on Aug. 22-24.
He said that if the Federal Reserve kicks off its stimulus tapering, some emerging markets with weak fundamentals are likely to be hit.
"(The participants at the policy retreat) did not think that a big crisis will occur, but they said some emerging countries would undergo difficulties regionally," Gov. Kim said before holding a quarterly meeting with economists from foreign investment banks.
He said that if a set of economic indicators are in line with anticipations, the Fed is likely to begin to cut its bond-buying program as expected.
His remarks came as some emerging countries are suffering from market turmoil as speculation over the Fed's stimulus tapering is accelerating foreign capital flight.
Kim said that the Korean economy is viewed by others as faring relatively well compared with other emerging countries.
Korea and Taiwan are showing relatively strong performances with their financial markets remaining stable, differentiating themselves from other crisis-prone emerging markets.
Korea posted a current account surplus for the 17th straight month in June with its cumulative surplus hitting $29.77 billion in the first half. Its FX reserves stood at $329.71 billion as of end-July and the country's short-term foreign debt, a weak spot for the Korean economy, declined to its lowest level in more than six years in the second quarter. (Yonhap news)
