Overview
- The Finance Ministry is setting up a team in its International Finance Bureau to track exporters’ dollar holdings and conversion behavior and to consider incentives for bringing proceeds home.
- Policy options under review include expanding tax breaks such as fully exempting dividends from overseas subsidiaries and offering favorable funding through KDB and the Export-Import Bank for firms converting dollars.
- Financial authorities will intensify scrutiny of securities firms’ sales and marketing of overseas products to address leveraged retail investing that adds to dollar demand.
- A four-party group of the Finance Ministry, the BOK, the NPS and the welfare ministry is drafting a framework to balance pension returns with FX stability, while the Health Ministry studies whether the NPS could issue dollar bonds that would require legal changes and entail interest costs.
- BOK board member Kim Jong-hwa said authorities cannot sit idle as the high exchange rate risks inflation and pressures smaller exporters, with the won trading in the mid-1,400s per dollar near a 16-year low.