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Gov't beefs up economic monitoring ahead of S. Korea-U.S. military exercise

All Headlines 18:34 November 26, 2010

SEOUL, Nov. 26 (Yonhap) -- South Korea has stepped up monitoring of financial, foreign exchange markets as Seoul and Washington prepare to conduct military maneuvers next week, government sources said Friday.

Sources at the Ministry of Strategy and Finance said the 24-hour monitoring team is keeping close tabs on the currency rates and other economic indicators that can be rocked by geopolitical uncertainties.

Pyongyang's Committee for the Peaceful Reunification of Korea threatened earlier in the day that North Korea will unleash a "shower of dreadful fire" that can wipe out enemies if its sovereignty is violated. The announcement carried by the official Korean Central News Agency came as South Korea and the United States are preparing to kickoff a large-scale naval exercise in the West Sea starting Sunday.

The exercise follows the shelling of Yeonpyeong Island near the maritime demarcation line by North Korean artillery on Tuesday that killed two South Korean marines and two civilians.

"The country has been on an emergency footing ever since the artillery attack, and a full set of contingency measures are in place," an official told Yonhap News Agency.

He pointed out that Seoul has already made clear that it will actively counter excessive herd behavior that could lead to sharp depreciation of the Korean won and spike interest rates.

"There are plans in place to inject adequate liquidity into the market and make use of the country's considerable foreign reserves if the need arises," the official said without elaborating.

Related to the risks posed by North Korea, Vice Finance Minister Yim Jong-yong said at an emergency economic policymakers meeting on Wednesday, that South Korea has the ability to absorb external shocks and there is considerable faith in the economy as a whole.


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