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Prepare for worst scenario(2016.02.13) < Opinion 1< The Korea Bulletin[영어 에세이ㆍ논문 달인 만들기 프로젝트 전종훈 언어연구소]
Asian stock markets suffered another round of rout after the Lunar New Year holiday. The Korean composite stock price index on Thursday fell nearly 3 percent, the steepest fall in nearly four years. The technology-laden Kosdaq also plunged nearly 5 percent.
Hong Kong’s benchmark index tumbled 5 percent, and Japan’s Nikkei 225 index retreated 7 percent over the last two trading days.
The European and U.S. bourses were also weak throughout the week. Stocks in Japan, Hong Kong and Germany lost more than 20 percent so far this year.
The free fall does not end in the equity market. Commodity prices, as well as other economic data, are all crumbling. Crude prices fell to the mid-20-dollar range and the Baltic Dry index, the international freight rate, tumbled below 300 for the first time ever.
The foreign exchange market is undergoing a roller coaster ride. The yen that plunged to 121.39 against the dollar on Jan. 29, when the central bank pushed the base rate into negative territory, shot up to 114.21 on Tuesday.
The strong dollar suddenly reversed direction, and the yuan has been moving wildly following the actions of authorities in Beijing. The won-dollar band moved by 7.9 won a day last month, 1.3 won more than last year’s average.
The four key rates that influence the economy - interest, foreign exchange, stock and oil - are fluctuating heavily. Worse, they do not show signs of easing or moving at a predictable speed and direction anytime soon.
The government needs to re-examine its economic policy in this volatile environment. The government has set economic growth targets of 3.1 percent and inflation of 2 percent for this year backed by estimates that oil prices will stay above $40 per barrel and the Chinese economy will keep growing at the mid-6-percent level.
From what’s going on now, all the projections could be wrong. Authorities must come up with contingency plans to consider the worst scenario. They also must come up with measures to fend off short-term speculative money that has been jumping from commodity to currency exchanges.
JoongAng Ilbo, Feb. 12, Page 30
Source: http://koreajoongangdaily.joins.com/news/article/Article.aspx?aid=3015021 |
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