SEOUL, November 5 (AJP) —Seoul authorities denied they were mulling to buy a large amount of long-term U.S. Treasuries.
The Ministry of Finance and Economy and the Bank of Korea (BOK) issued a joint statement rejecting a local media report that Seoul was considering buying substantial amounts of U.S. government debt amid heavy foreign selling.
The report claimed that South Korea had proposed the purchases to Washington as a way to expand its foreign exchange reserves while helping support U.S. Treasury prices amid concerns over American fiscal deficits and inflation.
It also claimed that extensive discussions on the proposed purchases had taken place during a meeting between senior South Korean and U.S. financial officials in Bangkok on Oct. 16.
The two authorities said the report was inaccurate and urged caution in reporting on matters concerning foreign exchange reserves.
They stressed that the composition of reserve assets and details of their management were not publicly disclosed.
The October meeting brought together Deputy Prime Minister and Finance Minister Lee Hyoung-il, BOK Governor Shin Hyun-song, U.S. Federal Reserve Chair Kevin Warsh and Deputy Treasury Secretary Francis Brooke.
According to the finance ministry's announcement at the time, the officials discussed economic conditions and bilateral financial cooperation, including ways to strengthen coordination in response to external financial shocks.
The ministry did not announce any agreement on U.S. Treasury purchases following the meeting.
South Korea's foreign exchange reserves stood at $443.16 billion at the end of October, up $2.60 billion from a month earlier, according to BOK data released Wednesday.
The joint statement did not provide further details of the country's reserve portfolio or investment operations.
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