The government is strengthening its economic diplomacy by utilizing foreign exchange holdings to help stem Europe's ongoing financial crisis and prevent sharp declines in the value of Asian currencies.
The expanded use of the foreign exchange reserves is also aimed at addressing criticism that the huge amount of funds are not being used effectively, observers said.
The government had used most of its foreign exchange reserves to buy U.S. Treasury bonds, which are regarded as a safe investment.
But faced with increasing international requests for the nation's contribution to resolve the European sovereign debt crisis, the government has started using its foreign exchange pool to contribute to the International Monetary Fund's plan to expand financial resources. (Yomiuri)
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