Government to encourage private sector to bring back overseas financial assets

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Sun, November 27, 2022 | 13:33

Economy

Government to encourage private sector to bring back overseas financial assets

Posted : 2022-09-25 16:51

Updated : 2022-09-26 15:43

U.S banknotes are stacked up for inspection at a counter-forgery center in Hana Bank in Seoul, Sept. 19. Yonhap

By Yi Whan-woo

The government is considering possible measures to encourage the private sector to bring back financial assets that are outside of Korea, worth over $700 billion in net value, as part of efforts to put the brakes on the Korean currency's sharp depreciation against the dollar.

Sources familiar with the matter said Sunday that the financial assets owned by the private sector abroad increased by more than 60-fold in less than the past eight years.

Such a rapid increase in overseas assets is adding to the woes of the Korean won, which slid to a more than 13-year low of 1,400 per dollar, Thursday, according to sources.

They said the government is thus pushing to offer incentives and other benefits for the private sector so as to have them bring back those assets.

The net value of the targeted financial assets is $744.1 billion as of the second quarter of 2022. The amount is about twice as large as the foreign reserves held by the Bank of Korea (BOK), according to sources.

"It is clear the overseas financial assets were behind a decline in the value of the Korean won, and their possible return may help curb the volatility in the currency market," a source said.

Another source speculated that the government may restrict the private sector from investing outside the country if the won's freefall against the greenback accelerates.

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