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Travelers to Freely Bring Out Korean Won Abroad

Posted June. 19, 2002 23:22,   


Starting from the beginning of next month, travelers will be allowed to bring an unlimited amount of the local currency abroad.

Until now travelers had to get an approval from the Bank of Korea if they wanted to bring over 10,000 dollars abroad without a specific reason.

Deputy Prime Minister Jeon Yun-cheol said that the decision has been made in a bid to enhance the international competitiveness of the Korean currency.

He made this announcement yesterday at a breakfast meeting with businessmen and representatives of the Federation of Korean Industries (FKI) at the Lotte Hotel in Seoul.

He said, "Korea is the world`s 13th largest country in terms of trade volumes and its foreign reserves amounts to about 110 billion dollars. Under this backdrop, the government has decided to liberalize the outflow of the won."

Under the new regulation, travelers will only be require to report to the customs authorities when they carry over 10,000 dollars in the Korean or foreign currencies.

The government expects that the liberalization will allow travelers to easily exchange local currencies into the won at banks and airports in foreign countries, and that the Korean currency will be widely used as a means for financial transactions on global markets.

If foreign transactions are made with the won, the nation doesn`t have to reserve a huge amount of foreign currency in the long term and the risk triggered by the fluctuation of currencies. But the exchange rate of the won can be destabilized and the currency management will be more difficult.

In a move to prevent a possible speculative move against the local currency, the government will require foreigners to obtain permission from the Bank of Korea when they borrow over 1 billion won or won-denominated bonds worth 5 billion won.

Foreigners will be required to get a permission from the finance ministry for the issuance of short-term won-denominated bonds.

Rae-Jeong Park ecopark@donga.com