South Korean President Lee Myung-bakon Sunday ordered his government to implement further tax reductions and expand its fiscal expenditures to prevent the financial crisis from affecting the real economy, said a spokesmanof the president.
"The government has to push ahead with additional tax cuts and expansion of its fiscal spending to ensure that the financial crisis would not lead to a slump in the real economy," the president was quoted by his spokesman Lee Dong-kwan as saying.
"Under the current circumstances, global sentiment towards the Korean economy and its market circumstances is very critical. Foreign investors, as well as South Korean people, should be givena full explanation of the government's economic policies and theirexpected benefits," the president was quoted as saying.
The president made the instructions after convening an emergency meeting of the country's top economic policy planners, including South Korean Prime Minister Han Seung-soo, Finance Minister Kang Man-soo, Bank of Korea Governor Lee Seong-tae, Financial Services Commission Chairman Jun Kwang Woo and Bahk Byung-won, senior presidential secretary for economic policy, in the morning.
The president asked the Cabinet ministers to double their efforts to consolidate international policy coordination by faithfully following up on a number of bilateral and multilateral agreements reached at the just-ended Asia-Europe Meeting summit, said the spokesman.
According to Bahk, the president and the officials agreed to adopt a lower interest rate to help lessen financial burdens on debt-heavy small businesses and households.
South Korea's central bank turned down its benchmark interest rate by 0.25 point to 5 percent on Oct. 9.
The president returned home Saturday night after attending the Asia-Europe Meeting (ASEM) summit in Beijing.
South Korea's benchmark Korea Composite Stock Price Index plummeted 110.96 points, or 10.57 percent, to 938.75 on Friday, dropping below the 1,000-mark for the first time since June 30, 2005.
The local currency closed at 1,422 won to one U.S. dollar on Friday. The Korean currency won has declined almost 34 percent to the greenback so far this year.
Source: Xinhua
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