This week, the Korean Won continued its downward slide, as a new round of volatility in global capital markets crimped a slight rally that had begun to build in the previous week. The currency has already fallen nearly 20% in 2008, as skittish investors have fled emerging markets en masse as the credit crisis has flared with renewed vigor. Last week, the government intimated with only a modicum of vagueness that it is prepared to use its $250 Billion in reserve to defend the Won, in order to forestall the kind of currency crisis that crippled its economy in 1997-1998. Bloomber News reports:

Finance Minister Kang said policy makers will manage monetary and fiscal policy in a "stable” manner to strike a balance between curbing inflation and supporting the economy, which grew 4.8 percent last quarter, the slowest in more than a year.

Read More: Korea’s Won Drops, Nearing 4-Year Low; Government Bonds Advance