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The Korean government is considering new measures to fight speculative financial transaction
in currency derivatives.
Government officials say with countries like the U.S. and Japan pursuing policies to supply
more money into their economies, Korea faces greater dangers of speculative foreign money
wreaking havoc its financial markets.
That's because a massive foreign capital inflow could also mean an abrupt exodus of money
when Korea is hit by outside shocks such as a global financial crisis.
Speaking at a seminar on Wednesday, Deputy Finance Minister Choi Jong-ku, said the Seoul
government is considering imposing taxes for speculative currency transactions and tightening
regulations for currency derivatives trading.
One of the targetted areas is the so-called non-deliverable forward, or NDF, currency
transactions, which are widely regarded as the hotbed for speculative investment.
NDF is an investment vehicle allowing speculators to vastly increase their investment volume
as they could bet on price fluctuations for products many times larger than their investment
funds.
Experts expect the government to reduce the transaction ceiling for currency derivatives
trading and make local and foreign banks report their transaction records every day or every
week instead of every month.
Hwang Ji-hye, Arirang News.