BOK's Kim Calls for Moves to Counter U.S. Quantitative Easing

Read my lips: there are NO currency war.......   :-)

BOK's Kim Calls for Moves to Counter U.S. Quantitative Easing

By Eunkyung Seo

   Nov. 22 (Bloomberg) -- Bank of Korea Governor Kim Choong Soo will
tomorrow call on central banks to act to counter the impact of the
U.S.'s expanded monetary stimulus.

   "The changes in global macroeconomic conditions after the U.S.
Federal Reserve's recent additional quantitative easing are looming as
new challenges for central banks' monetary policy,"

Kim will tell central bank officials from Asia and Europe in a speech in
Seoul, according to prepared remarks. "We will need to devise necessary
countermeasures to deal with the possible changes in the monetary policy
transmission channels and the limitations on policy effectiveness."

   South Korea raised interest rates last week and plans to revive a
bond tax on foreign investors to curb fund inflows driving up its
currency. The finance ministry said it will back legislation reinstating
a 14 percent tax on interest income from treasury and central bank bonds
and a 20 percent capital gains levy on their sale.

   The leaders of the Group of 20 on Nov. 12 gave emerging- market
economies more room to counter funds surging into their higher-yielding
markets due to weaker growth in developed countries and the U.S. Federal
Reserve's plan to buy $600 billion of Treasuries. Countries from Latin
America to Asia have already taken steps to slow inflows and restrain
their currencies to protect exporters and prevent asset bubbles.

   Kim will also urge governments and central banks around the world
to enhance "policy coordination" to prevent another crisis or deal with
its aftermath, according to comments from his speech released by the
central bank today.

   The Bank of Korea raised the seven-day repurchase rate by

0.25 percentage point to 2.5 percent on Nov. 16 after inflation surged
past the bank's ceiling. The won, which has appreciated 3 percent this
year, was up 0.6 percent at 1,126.80 per dollar as of 11:26 a.m. local
time.

   The Bank of Korea is hosting a four-day seminar starting tomorrow
to discuss the role and policies of central banks in maintaining
financial stability. Central bank officials are attending from Japan,
China, Indonesia, Malaysia, India, Thailand, Australia, Belgium, Russia,
Poland, Denmark, Finland, Spain, Saudi Arabia, Israel, and South Africa.