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Friday, December 5, 1997 Published at 11:13 GMT


South Korean share prices rise after IMF deal
image: [ A couple study stock prices in Seoul ]
A couple study stock prices in Seoul

Share prices on the Korean Stock Exchange have risen by 7% for the second time in two days in response to agreement on the IMF rescue package, worth more than $57bn for the country's ailing economy.

The IMF says it will accept growth of 2.5% in the South Korean economy next year, as compared with 6% growth in 1997. Inflation is expected to rise to 5% in l998.

Finance Minister Lim Chang-Yuel has confirmed that Seoul is accepting an IMF condition that insolvent financial units, including banks, be subject to mergers and acquisitions or even liquidation.

Analysts in Seoul have expressed investors' concerns about the repercussions of the IMF package and point out that currency shortages may be too great to be resolved in the short term by IMF funds.

The Malaysian ringgit and the Indonesian rupiah plunged to all-time lows after confirmation of the economic rescue package for South Korea.

The ANZ Investment Bank said: "Even if the Korean situation calms, we do not see any positive news to change the overall picture for support (for the rupiah)."

The Japanese yen fell against the US dollar as fears persisted that the yen would depreciate to avoid being overvalued against the South Korean won.

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