The government is on the alert as massive inflows of foreign capital are putting upward pressure on the Korean currency, threatening to erode the competitiveness of Korea’s exports.

The Ministry of Strategy and Finance hurriedly convened a meeting Tuesday with chief financial officers of major export companies to discuss measures to stabilize the currency markets.

The ministry’s move was prompted by the Korean won’s sharp rise against the greenback on Monday. It wanted to make sure that Korean exporters did not add fuel to the won’s steep rise by selling their dollar holdings.

The Korean currency has gained about 4 percent against the dollar since mid-May when the U.S. Federal Reserve first hinted that a pullback in its bond purchases was likely by year’s end.

The Fed’s suggestion of cutting its monetary stimulus triggered outflows of money from emerging economies. But Korea has witnessed money coming in. Since July, foreign investors have net bought more than 10 trillion won worth of local stocks. Analysts expect the buying spree to continue for some time.

For stock investors, that is good news. But for the nation, it is not necessarily so. That’s because it could send the Korean won further up against the dollar, making Korean products more expensive abroad.

Furthermore, money that has moved in moves out when market conditions change. Should foreign capital leave the nation all at once, it would throw the financial system into turmoil, which would in turn rattle the real economy.

So massive hot money inflows are cause for grave concern. Financial officials need to step up monitoring of the financial markets and intervene swiftly when necessary.

While keeping the Korean currency stable is important, policymakers face a more important task. They need to prepare the nation for higher interest rates as the Fed is expected to start scaling back its quantitative easing in the not-so-distant future.

Interest rates have already gone up at the prospect of a reduction in bond purchases. When the Fed actually begins a pullback, interest rates will go up further, increasing the debt repayment burdens of indebted households and businesses.

The government needs to press lawmakers to pass the bills that are aimed at reducing the household debt burden. Bills designed to stimulate the real estate market and revitalize the economy should be put in place soon as well.

Policymakers also need to push banks to force shaky businesses to swallow the bitter pill of restructuring. Banks’ failure to conduct corporate restructuring on an ongoing basis has resulted in higher costs for handling business groups with liquidity problems, such as Woongjin and STX.