S. Korea may miss export target due to firmer won

South Korea may fall short of its export growth target for this year due mainly to the won's strength against the U.S. dollar, a senior government official said Wednesday.

"We are concerned about the negative impact that the strong won has on exports," Deputy Finance Minister Kim Seok-dong said in a radio interview. "So far, exports have been good, but the firmer won and high oil prices may give an impact on exports in the coming months."

If the won strengthens further versus the greenback, the annual export growth may fall short of the government's projection of 11.7 percent, he said. South Korea is targeting $318 billion worth of exports in 2006.

Exports, one of the economy's growth engines, rose a slower-than-expected 12.7 percent on an annual basis in April.

The won hit its highest level in more than eight-and-a-half years against the dollar last week. So far this year, it has gained around 7 percent to the dollar.

The local currency gained 8 won to close at 936.90 against the dollar on Wednesday as exporters converted their dollar holdings into the won.

A stronger won makes South Korean cars, chips and other goods more expensive to overseas buyers, hurting exporters' profitability.

The South Korean economy, Asia's fourth-largest, is expected to grow 5 percent this year on the back of a recovery in private spending and resilient exports. Last year, it expanded 4 percent.

Another deputy finance minister, Kim Sung-jin, said in a separate radio interview Wednesday that the country's currency authorities will not tolerate any speculative moves in the market.

Meanwhile, Finance Minister Han Duck-soo said Wednesday the foreign exchange authorities are paying close attention to the currency market.

The minister said his ministry might secure more funds for intervention if necessary, but may ask the parliament to allow it to increase bond sales to finance market operations.

Chin Dong-soo, a newly appointed vice finance minister, also mentioned on Wednesday that the ministry is closely looking into the currency market, implying that the currency authorities will step in if necessary. Seoul, May 17 (Yonhap News)