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S Korea may control liquidity if necessary: fin min

South Korea is planning measures to limit money supply only for regions of the country with excessive liquidity, Finance Minister Yoon Jeung-hyun said on Friday.

world Updated: Jun 15, 2009 12:05 IST

South Korea is planning measures to limit money supply only for regions of the country with excessive liquidity, Finance Minister Yoon Jeung-hyun said on Friday.

The country was preparing a strategy to exit its loose monetary policy, although it was still too early to implement such a strategy, said Yoon, reiterating the government's stance toward the economy.

"It is not desirable to apply uniform property market measures for regions with many unsold homes. The government will apply restrictive measures to regions with signs of excessive liquidity," Yoon said in a prepared speech for a local television debate programme.

On a possible shift in monetary policy, Yoon said the timing for the implementation of an exit strategy was important.

"If we implement the exit policy too quickly, it will throw cold water on the economy, which has started to recover. If it's too late, the economy will face inflation," Yoon said.

"It's not yet time for an exit strategy, but we are preparing for one, while considering various conditions," he added.

The remarks came as the government repeated its pledge to maintain an expansionary monetary policy to help Asia's fourth-largest economy recover, despite concerns that a rush of liquidity might already be starting to cause problems.