South Korea will take proactive measures to prepare for any market volatility that can disrupt efforts to revive economic growth, including revamping the levy on foreign debts, a senior policymaker said Friday.
  

Speaking at the macroeconomic financial meeting in Seoul, Vice Finance Minister Joo Hyung-hwan cited various external developments that were raising financial market risks -- the likelihood of the U.S. hiking up interest rates in the second half of 2015, concerns about the economic fundamentals of newly emerging economies and oil export nations, and sluggish growth in some eurozone countries.

Joo said that while South Korea maintains "strong fundamentals," it needs to prepare for any contingency to keep any fallout manageable.
  

Asia's fourth-largest economy has foreign exchange reserves of $362.2 billion, its short-term foreign exchange debt rate stands at under-30 percent of all liabilities and the country enjoys a current account surplus of around $80 billion.
  

The policymaker said as part of the proactive plan, the government will revamp the so-called foreign exchange soundness allotment system. The scheme introduced in 2011 compels financial firms to pay charges on all non-deposit foreign currency liabilities. This measure aims to discourage firms from holding onto too much foreign debt that could exit the country in times of crisis.
  

"Changes to take place within the year call for all credit specialized financial companies, brokerages and insurers to come under the allotment system that will reduce their exposure to external volatility shocks," the vice minister said.
  

He added that the scheme will also be streamlined so that only foreign currency debt held by institutions that has a maturity of less than a year will charged.
  

The official said local lenders will be asked to set up their own firewalls to cope with any sudden exodus of funds, while an internationally accepted liquidity coverage ratio monitoring system will be introduced.
  

The country's early warnings system will be drastically updated to factor in the latest drop in crude oil prices and other developments that were not viewed as dangerous, Joo said. (Yonhap)