SEOUL (Reuters) -South Korea plans to unveil incentives for long-term stock investors, while making efforts to ensure foreign exchange stability, its finance minister said on Wednesday.
Since taking office in June, the administration of President Lee Jae Myung has vowed various reforms to boost the domestic stock market, driving a rally in the benchmark index this year.
The won currency has weakened 0.8% this week to trade at 1,464.8 a dollar on Wednesday, after last week’s sharp gains following Finance Minister Koo Yun-cheol’s pledge for market stabilising measures.
“We plan to introduce incentive measures for small investors, who stay in capital markets for a long time or invest in certain stocks in the long term,” Koo told reporters.
He did not say when the measures would take effect, however.
Regarding the foreign exchange market, Koo said the government was consulting primarily with market participants to prevent excessive uncertainty and instability in exchange rates.
Koo said he had met major exporters, who were not repatriating U.S. dollars earned abroad, but has yet to meet officials of the national pension fund, which has a growing demand for overseas investment.
“The government is spending taxpayers’ money for U.S. investments, in return for lower tariffs, which benefit companies,” Koo said, referring to a $350-billion investment package included in a trade deal with the United States.
Companies should be aware of these efforts by the government and taxpayers, he added.
Referring to the investment package, Koo said a new entity would be set up to manage the funds and proactively participate in U.S. projects, with a bill on the package set to be introduced in parliament this month.
“We will have to propose projects to the United States first and be proactive to take the lead in value chains of new growth engines,” Koo added.
He was echoing comments on Friday by the industry minister that South Korea had already proposed some projects.
(Reporting by Jihoon Lee; Editing by Christopher Cushing and Clarence Fernandez)
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