SEOUL - South Korea's top economic policymaker said Wednesday that the depreciation of Chinese yuan would positively affect the South Korean economy as a weaker yuan would boost the Chinese economy, the largest trading partner of South Korea.
Finance Minister Choi Kyung-hwan told reporters after a meeting with economy-related ministers that the yuan's recent depreciation boosted volatility in the foreign exchange market.
Choi, however, said that if the Chinese economy is bolstered amid the weak yuan, it would have a positive effect on the South Korean economy, which depends on China for the largest part of its exports.
His comments came after the yuan declined to the dollar for two straight days after upgrading the reference rate system, driving the South Korean currency to fall sharply against the dollar in tandem.
The won/dollar exchange rate settled at 1,190.8 per dollar, up 11.7 won from the previous day. It was the highest close since Oct 4, 2011. The exchange rate jumped by 15.9 won per dollar on Tuesday.
The South Korean currency's depreciation boosted expectations that local exporters would enhance earnings from overseas. The overseas profits denominated in the dollar should be swapped for the local currency.
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