SEOUL: The South Korean government unveiled measures on Monday, allowing it access to more details on the activities of foreign investors in a bid to reduce volatility in financial markets.
Until now, Seoul banks must report a daily change of money volume in financial investment accounts held by foreigners.
But under a new rule to take effect in April, they will have to offer a detailed breakdown of the money flow by types of investment such as stocks and bonds, the Bank of Korea and the finance ministry said in a joint statement.
The change will allow Seoul financial authorities to better track capital flows of foreign investors and to respond to sudden volatility in markets -- particularly stock markets -- more quickly and effectively, it said.
"Since the global financial crisis, capital flows in foreigners' stock trading have become far more volatile than before... the change will help us monitor the money flows of foreign investors more closely," it said.
The move came less than a week after the authorities announced a plan to lower the ceiling on foreign exchange forward positions by foreign and local banks in a bid to ease volatility in the currency market.
The Korean won has gained about nine per cent against the dollar since May -- a worrying trend for the country's export-driven economy which is already struggling with the impact of the downturn in its US and European markets.
Seoul fears that "hot money" coming into the country could exit just as swiftly -- as it did during the 1997-1998 East Asian financial crisis, which forced the country to seek IMF aid, and the 2008 global crisis.
- AFP/xq
S Korea tightens monitoring of foreign investment
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S Korea tightens monitoring of foreign investment
