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10% Rise Sought, Official Says : U.S. Asks South Korea to Boost Value of Currency

January 14, 1988|Associated Press

SEOUL, South Korea — The United States has asked South Korea to raise the value of its won currency by 10% to 15% against the dollar, Finance Minister Sakong Il said Wednesday.

He said this would be in addition to about an 8% appreciation of the won in the past year.

This was the first time a Seoul official had disclosed a specific revaluation amount sought by Washington.

In the past, South Korean officials had said only that the United States wanted a one-time drastic revaluation of the won, instead of a continuation of its gradual rise.

A higher-valued won tends to make South Korea's goods more expensive in the United States and American goods cheaper in South Korea.

Speaking to a group of high school principals on economic issues, the finance minister said the United States was requesting that South Korea drastically revalue the won and open its market wider in view of Korea's growing trade surplus, which stood at about $9.2 billion last year.

The minister said it would be difficult for South Korea to counter American pressure for a higher won unless Korea makes efforts for more market-opening measures.

He said the currencies of Japan and Taiwan rose about 20% against the dollar last year, much higher than the South Korean currency.

The minister said South Korea should respond to the U.S. demands by opening the Korean market wider for American insurance companies and cigarettes and other products, while reducing tariff rates.

Washington reportedly has threatened to take retaliatory action unless South Korea agrees soon to such market-opening steps.

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