The International Monetary Fund (IMF)said South Korea will not go through another financial crisis, stressing that the country is now in much better shape than 1997, the country's Yonhap News Agency reported Thursday.
"While Korea may face a difficult macroeconomic environment in the coming quarters, there is no reason to expect a financial crisis," said Jerry Schiff, assistant director of the Asia-Pacific Department.
Schiff said South Korea is clearly facing a number of challenges amid slowing global economy and volatile global financial markets
But he said the current situation of South Korea is very different from 1997.
"While both periods are characterized by rising external debt, a depreciating currency and a current account deficit, these similarities are largely superficial," Said Schiff said.
The IMF official said compare to a decade ago the South Korean economy is far more resilient and has stronger fundamentals.
"First, Korea has accumulated a large stock of foreign reserves, which can act as a buffer against any external shocks," he said.
He said the country's financial sector is much healthier, with not-performing loans less than 1 percent.
Schiff also cited the improvement of corporate governance, a flexible exchange rate system and an effective inflation targeting framework run by the Bank of Korea.
Source: Xinhua
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