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South Korea: Fisher Capital Management Seoul - The South Korean economy is expected to grow by 4-5% in 2010. The government's efforts were seriously questioned when it clipped the independence of the central bank when the government sent its observers to the central bank's policy meetings.

However, the central bank will start raising interest rates in the third quarter to prevent inflation and asset bubbles. For the time being inflation is stable. It fell from 3.1% in January to 2.7% in February, but inflation will accelerate in the second half due to higher oil prices and rising imports. This should see policy interest rates
to go up by 25 basis points in the third quarter and another 25 basis points in December.

Proposed rules for derivatives trading could push up financing costs and create “material risks” for the global economy because of a lack of co-ordination, the US and European Union have been warned by the financial services industry.
The warning is contained in a letter sent on Wednesday by eight leading trade associations – including the European Banking Federation, the Futures and Options Association, the Investment Management Association and the Wholesale Market Brokers’ Association – to Tim Geithner, the US Treasury secretary, and Michel Barnier, EU internal market commissioner.