South Korea Is Considering Restoring &Nbsp; Levying Taxes On Foreign Investors.

Jin Zhongxiu, President of South Korea's central bank, said he was considering restoring foreign countries.

Once decided to implement, South Korea will be the emerging market with more stringent control over bond investment after Brazil and Thailand.

In May 2009, South Korea abolished the withholding tax and capital gains tax on foreign investment in Korean bonds and MSB, in order to attract long-term foreign investment.

Jin Zhongxiu said at a seminar yesterday: "a key factor to consider when deciding is to refer to international standards and practices."

To curb the rise of baht, Thailand earlier this month joined in the control of foreign investment and imposed a 15% withholding tax on capital gains and interest income from foreign investment bonds.

Earlier, Brazil announced that it would raise the financial activity tax payable on foreign investment in fixed income securities from 2% to 4%.

The market has expected South Korea to announce policies to deal with capital inflows.

The won gained 7.2% against the US dollar in the third quarter, the biggest gain in Asian currencies.

However, Kuroda Higashihiko, President of the Asian Development Bank, said in a recent meeting in Seoul that the current level of the Korean won is still underestimated compared with the level before the global financial crisis.

Jin Zhongxiu said that massive capital inflows would trigger risks such as excessive exchange rate fluctuations and asset price bubbles, although large capital inflows would drive the development of local economies, but at the same time trigger uncertainty in the market. Capital restriction is an effective tool for policy regulation, although it will lead to a certain degree of market distortion and cost increase.

However, he stressed that South Korea would not consider implementing these measures until the summit of the group of 20 was held in Seoul in November.