S Korea's reserves fall 11% as Won weakens

FT Nov 5/2008
Government props up（支える local currency
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Dollar funding situation serious
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South Korea's foreign exchange reserves declined by 27.4bin, or 11 per cent, lats month, an amount greater than the entire reserves of
Asia's fourth largest economy at the time of the 1997 financial crisis.

The decline came as the government aggressively intervened in the currency market to prop up the weaker local currency and provided dollars to local banks suffering from a liquidity crunch.

The reserves fell from 239.7bn in September to 212.3bn in October.

The country had 22.3bn in reserves on the eve of the 1997 crisis.
There won't be a problem in maintaining our external credibility as the current size of these reserves is sufficient to meet external payment requirements in case of emergency
South Korea is the world's sixth-largest holder of foreign exchange but the government's increasingly costly effort to shore up（支える） the won is bringing back memories of its futile battle to defend its currency during the 1997 Asian financial crisis.Korean won has lost almost 30per cent against the dollar this year.