Wrong Policy of Intervention

Dear editor,

The decision of the Korean financial authorities to intervene in the currency market in order to prevent a further devaluation of the won is economically wrong.

State intervention always harms the market and, based on long-term considerations, will never be successful. Selling foreign exchange reserves will only be a flash in the pan.

When Korea wants to move on in strengthening its economy and stabilizing its currency exchange rate, it has to be aware of the fact that its economic policy has to be geared to its foreign trade and payments and not to its domestic market.

Walter Klitz

Resident representative

Friedrich Naumann Foundation for Liberty Korea Office in Seoul