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Korea's currency demand falls in economic slump

SEOUL - The amount of the Bank of Korea's siphon funds surpassed that of its currency issuance last year due to decreased currency demand brought on by an economic slowdown, the central bank said.

The net recoup of currency, or the bank's total currency recoup minus its total currency issuance, amounted to 316.8 billion won (US$275 million) as of the end of last year, only 17.2 percent of that in 2002, the bank said on Friday.

The aggregate of last year's currency issuance came to 24.49 trillion won.

As of the end of April this year, the net recoup of currency increased to 1.08 trillion won.

A BOK official attributed the increase to an economic downturn.

"The country is seeing a slowdown in currency increase, which is a measure of economic trade," the official said.

The central bank siphons currency from the local short-term money market if currency demand is low as a result of an economic slump, he added.

Net currency issuance surged for two years in a row from 2001 to 2002 with 911.1 billion won and 1.84 trillion won, respectively, before slowing down last year.

(Asia Pulse/Yonhap)

Jun 26, 2004

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