How can Korea solve their currency problem?
As an expat I am paid in Korean Won. And I planned on moving to another Asian country in a couple of weeks. As a consequence I would love it if the government used its huge foreign reserve purse to temporarily boost the exchange rate. But that would not only be unfair, but really irresponsible. Even if trade barriers remain high and labor unions can legally dictate terms, the way the Lee administration can increase the value of the currency is one, temporary simple action: increase the interest rate. Yes, even ignoring the bullet points from a couple days ago, higher interest rates would help immensely. In order to take out loans or use credit cards, higher rates will force consumers to save more. This would also allow banks to offer higher interest rates on savings accounts, money market funds, CDs and a slew of other saving vehicles. And since economic growth is ultimately funded by savings, not spending, because banks would have more assets they could offer more loans to entrepreneu
