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UPDATE 1-S.Korea warns forex tension could fan protectionism

Published 10/14/2010, 09:07 PM
Updated 10/14/2010, 09:12 PM

* Feels need to sternly deal with protectionism - fin min

* South Korea is chair of Nov summit of G20 leaders

* Remarks come after Japan questions South Korea's leadership (Updates with quote, details)

SEOUL, Oct 15 (Reuters) - South Korea, which will chair next month's G20 summit, warned on Friday that international tensions over foreign exchange policy could lead to increased trade protectionism.

Finance Minister Yoon Jeung-hyun said during a scheduled meeting of senior trade-related officials that the country, as the chair of the Group of 20 economies summit, felt the need to "sternly deal with" trade protectionist moves.

"With the recovery slow in the advanced countries, each country relies more on exports for growth, and tension surrounding foreign exchange rates is intensifying, and there are signs that this could develop into trade protectionism," Yoon said.

His opening remarks at the meeting were open to the media.

The remarks came after Japan's finance minister called into question South Korea's leadership of the G20 forum in his remarks before the country's parliament on Wednesday.

Yoon, who is due to chair the meetings of G20 finance ministers and central bank governors next week, has not directly responded to the remarks by his Japanese counterpart. (Reporting by Cheon Jong-woo; Writing by Yoo Choonsik; Editing by Ken Wills)

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