KOREA PLANS TO OPEN MARKETS TO EASE WON PRESSURE
South Korea will further open its market
to help cut its trade surplus with the U.S. And to fight off
pressure to revalue the won against the dollar, a government
spokesman said.
    The spokesman said Korean trade minister Rha Woong-Bae's
stand in Washington yesterday against pressure from industrial
nations to revalue the won underlined the government's
determination to stand firm.
    Rha told the U.S. Chamber of Commerce "Demands that Korea
carry out a drastic and sudden currency revaluation of five or
10 pct are, I believe, extremely ill-advised."
    Deputy prime minister Kim Mahn-Je told a meeting of local
businessmen "The government's policy on the question of
revaluing the won is to maintain a steadfast position."
    Kim said South Korea was ready to move slowly to raise the
won's value because of its heavy foreign debt which stood at
44.5 billion dlrs at the end of 1986.
    Six industrialised nations agreed in Paris last month that
newly industrialising countries, such as South Korea and
Taiwan, should allow their currencies to appreciate.
    But local businessmen have said won/dollar parity has
already reached "a crisis level."
    An official of the Korea Traders' Association (KTA) said if
the won strengthened another five pct, this would mean the loss
of profitability for nearly half of all South Korean exporters.
    "We are determined not to go the way of Latin American
debtor nations which have suspended interest payments of their
debts," the spokesman said. "The only way to keep our good record
is to maintain our exports.+
    The trade minister said yesterday should Seoul revalue the
won suddenly Korea would run "a tremendous trade deficit and
could degenerate into a country, like many other developing
countries, which is reneging on its international obligations."
    The spokesman said South Korea had been gradually
appreciating its currency, ruling out a major revaluation. So
far this year, the won has gone up by 0.8 pct against the
dollar after a 3.34 pct revaluation in 1986.
    He said South Korea was selecting "many" of 122 items on
which Washington recently asked Seoul to lower tariffs to help
narrow its trade surplus with the U.S. No further details were
given.
    Seoul announced in January the lifting of bans on 158
items, including sensitive agricultural products and large
cars, effective from July.
    South Korea posted its first ever current account surplus
last year, due largely to a trade surplus with the U.S. Of 7.1
billion dlrs, against a 4.3 billion deficit in 1985. It earlier
forecast that its current account surplus could reach eight
billion dlrs this year.
    But the government official said the surplus would be held
at around five billion dlrs to avoid further pressure by
industrialised nations to push up the value of its currency.
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