And we must be always ready to deploy new policy tools, if we are to steer a safe and steady course while awaiting calmer weather. Let me end by quoting Micheal Mussa, a former Chief Economist of the IMF, on the merits of economic policy tools: “My favourite economic policy tool is prayer.
Factors making for the fragility of the Korean foreign exchange and financial markets under the impact of external shocks included the sharp rise in short-term foreign debt and the inadequate asset liability management of financial institutions. Total external debt more than doubled after 2006 and the ratio of short-term external debt surged from 46% to 97%.