South Korea’s top central banker has stressed the need to smooth the volatility of cross-border capital flows as emerging countries cannot block liquidity inflows stemming from advanced economies’ monetary easing steps.

Central banks in the U.S. and the eurozone announced in September moves to take unconventional monetary easing steps in a bid to prop up their fragile economies, dogged by the eurozone debt crisis.

The Federal Reserve pledged Thursday to pump $40 billion every month into the U.S. economy by buying mortgage-backed securities in its third round of so-called quantitative easing.

“(Inflows of) such global liquidity are expected to lead to huge difficulty in managing capital flows,” Bank of Korea Gov. Kim Choong-soo said in a meeting with reporters on Friday.

“We cannot block liquidity inflows, so it is very important for us to control the volatility of such liquidity to some degree,” Kim added. His remarks were embargoed until noon Sunday.

Liquidity to be unleashed is expected to make its way into emerging countries, raising concerns the flood of capital inflow will raise the risks of inflation and strengthen currencies as the global economy slows. (Yonhap News)