Jin Nyum: ¡°Korea will repay IMF in 2001¡±

The Korean government has decided to repay US$6 billion it borrowed from the International Monetary Fund in emergency financing by the end of next year. Then, Korea will become a creditor country from a beneficiary of loans in just three years, thus enhancing its position in the international financial world.

Minister of Finance and Economy Jin Nyum said in his keynote speech at the 55th IMF-World Bank meeting in Prague, Czech Republic, on Wednesday that Korea plans to repay the debut to the IMF on a gradual basis from this coming December to reflect the nation's favorable economic situation.

The repayment is intended to lift Korea's credit standing, as well as to lower the interest rates of offshore borrowing by Korean financial institutions. Since the outbreak of its foreign exchange crisis in late 1997, Korea has borrowed a total of US$21 billion from the IMF and so far repaid US$13.5 billion.

Korea originally was scheduled to repay the remaining US$6 billion between next year and 2004. If Korea repays the remainder next year, then it will have made the payment three years ahead of schedule.

Kim Yong-Duk, head of the International Financing Bureau of the Ministry of Finance and Economy, said that the standby financing is a fund designed to help countries suffering from financial crisis, so the government has made a conclusion that it is desirable to redeem the fund early, as Korea has successfully overcome the foreign exchange crisis.

He noted that Korea will make the repayment starting in December through the third quarter of next year. However, some experts point out that the early redemption of the IMF loan could place Korea in a vulnerable situation from external shocks due to the reduction in foreign exchange reserves at a time when next year's international balance of payment situation is unclear due largely to high oil prices.

Meanwhile, Minister Jin called for an improvement in operation of international financial organizations, noting that IMF's current country-by-country quota money due and voting right does not properly reflect the economic power of Asia's emerging market countries like Korea.