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Korean travelers to China and Southeast Asia will be able to directly exchange the won into local currencies there, while Korean businesses can pay foreign trading partners in won as well as dollars. A presidential economy committee on Friday announced these and other steps to liberalize foreign exchange transactions at a meeting presided over by President Roh Moo-hyun.
Meanwhile, a US$300,000 ceiling on private investment in overseas real estate will be lifted late this month.
The government decided to allow residents to take won abroad if they declare it starting next year. Under the current law, permission from the Finance Ministry is needed to take more than W10 million (about $10,000) out of the country.
Bank of Korea official Byun Jae-young said when restrictions are lifted, travelers to China or Southeast Asian countries will no longer have to exchange currencies before leaving Korea because foreign banks can buy the won in large quantities and travelers can exchange currencies at their destinations.
Companies will be able to use the won when paying their trading partners. However, recognition for the won as an international settlement currency hinges on a sound Korean economy, Financial Minister Han Duck-soo said.
The government will also in the second half of the year abolish foreign exchange-related regulations that restrict business activities.
For example, when borrowing less than US$10 million a day from their headquarters or subsidiaries, domestic and foreign corporations will no longer need permission from the Bank of Korea or declare the transaction. If companies that exported and imported goods worth over $100 million in the previous year pay trading partners in cash, they will no longer have to report this to banks.
(englishnews@chosun.com )
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