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S.Korea sees limited fallout from Dubai crisis

Published 11/29/2009, 01:59 AM
Updated 11/29/2009, 02:03 AM

SEOUL, Nov 29 (Reuters) - South Korean regulators see little chance of a full-scale global problem stemming from Dubai's debt crisis and expect a limited impact on local financial markets, the country's Financial Services Commission (FSC) said on Sunday.

"There's little chance that this problem would grow into a systematic risk on a global scale like the Lehman Brothers case did, according to the consensus," the FSC said in a statement following a meeting to discuss the Dubai debt problems.

On Friday, the Seoul stock market <.KS11> hit a four-month closing low and the won currency fell the most in more than four months against the dollar, hammered by concerns about Dubai's crisis.

Financial and construction shares tumbled while local government bond prices soared on a massive flight to safely.

"South Korea has small exposure for related assets and the economy and financial markets have shown a solid performance," the FSC said.

The watchdog, however, added it would closely monitor for a possible spread of investor jitters and respond when necessary, in coordination with the finance ministry and the central bank. (Reporting by Rhee So-eui; Editing by Clarence Fernandez) ((soeui.rhee@thomsonreuters.com; +82 2 3704 5650; Reuters Messaging: soeui.rhee.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))

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