South Korea Also Announces Stimulus

Following Japan’s lead, South Korea, whose failing currency has been the subject of much forex news in the past few months, has announced a stimulus package equaling 14 trillion won, or about $11 billion. As South Korea, like so many countries around the world, becomes further entrenched in the global credit crisis, the economic outlook for next year has descended to gloomy levels, which most analysts projecting 2.5% to 3.5% growth for 2009 and the government offering an only slightly more optimistic 4% prediction.

According to the Ministry of Strategy and Finance, 11 billion of the stimulus will be allocated to new spending, including infrastructure-related projects, small business assistance, local government spending, and low-income household assistance. The government also plans about three trillion won in tax cuts and other incentives.

Thus far, however, the stimulus, along with a series of interest rate cuts, has been unable to stop the won’s losses in forex online trading. To date, the won has fallen 32.7%, making it one of the world’s worst performing currencies, according to the Associated Press.