Yuan devaluation puts 'considerable pressure' on South Korean economy: finmin

[SEOUL] South Korea's finance minister said on Thursday that China's decision to devalue the yuan puts"considerable pressure" on South Korea's economy due to the global financial turmoil it has sparked. "It's true that (the devaluation) has laid considerable pressure on the local economy as volatility in the local stock and foreign exchange markets has increased and worries have risen over the competitiveness of exporters who compete with Chinese counterparts," Finance Minister Choi Kyung-hwan told parliament.

The minister also said the devaluation can help Korea's exports, but his fresh remarks were seen as a step back from his earlier ones that it would give a boost to local exports, as a large chunk of shipments to China are intermediate goods which are processed there for re-export.

Mr Choi said the government was looking into possible responses should risks facing the South Korean economy increase due to the yuan devaluation along with preparations by the US Federal Reserve to start raising interest rates.

Markets largely shrugged off Mr Choi's comments, as the minutes from last month's Federal Reserve monetary policy meeting were the focus of attention on Thursday.

REUTERS