South Korea to lobby IMF over ‘currency manipulator’ tag

15 Mar 18

The South Korean government is set to talk to the International Monetary Fund in an effort to avoid being labelled a ‘currency manipulator’ by the US, the finance minister has said.

The Asian country, along with China, has avoided being classified as a currency manipulator in the US Treasury’s biannual currency report, but has been kept on a “monitoring list”.

Finance minister Kim Dong-yeon said in a press conference: “We do not expect the US to label [South Korea] as a currency manipulator, but we cannot be certain for now.

“We will discuss [our currency policies] with the IMF. We are doing so using various channels, and we will try our best to make sure we don’t get the currency-manipulator label.”

He also said the government has yet to decide whether there will be a supplementary budget or not, but any spending plan needs to be carried out quickly once the decision has been made to boost growth.

The term ‘currency manipulator’ is used to describe governments and central banks that artificially lower the value of their currency to gain an unfair competitive advantage.

The US Treasury makes a biannual assessment of the foreign-exchange policies of its big trading partners, using three measures.

The measures are: whether the country runs a sizable trade surplus with America; whether its current account surplus exceeds 3% of GDP; and whether it spends more than 2% a year to buy foreign assets to suppress the value of its currency.

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