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S KOREAN GOVT TO TAKE STEPS TO REDUCE FX OPTION LIABILITIES.

AsiaPulse News

| October 01, 2008 | COPYRIGHT 2008 Asia Pulse Pty Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

SEOUL, Oct 1 Asia Pulse - The South Korean government is planning to announce measures to reduce the fallout of currency option derivatives that are threatening many small- and medium-size enterprises (SMEs), a senior policymaker said Tuesday.

Vice Knowledge Economy Minister Rim Che-min said in a parliament committee meeting that the government is in the process of finding a solution to investments made in so-called knock-in, knock-out (KIKO) hedging.

"The aim is to prevent exporters that are otherwise doing well from going bankrupt due to losses incurred by unexpected turns in the won-dollar exchange rate," he told lawmakers.

KIKO, introduced late last year, was designed to reduce risks caused by a rise in the Korean won versus the dollar, but has since become ...

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