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South Korea's central bank is not at the stage of talking about contingency planning over stalled U.S. debt ceiling increase negotiations, the Bank of Korea's top foreign reserves management official told Reuters on Tuesday.
"We are not at that stage at present," Hong Taeg-ki, who is in charge of managing the world's seventh-largest foreign reserves, said in his office when asked if the Bank of Korea was discussing contingency plans.
"We are optimistic the U.S. will avoid facing a catastrophic situation."
The country's finance minister, Bahk Jae-wan, also said in an interview with Reuters last Friday his ministry was not drafting contingency plans regarding the U.S. debt crisis.
Hong also said the market's consensus was that President Barack Obama had tools to avert a default even if the U.S. Congress and Administration fail to strike a deal by the Aug. 2 deadline.
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He declined to elaborate on what the tools might be.
He said all of South Korea's more than $300 billion in foreign reserves was not required to be invested in AAA-rated assets, although he declined to provide the minimum credit rating for the management of foreign reserves.
Hong declined to comment when asked if the Bank of Korea was refraining from buying U.S. Treasury debt securities since the U.S. debt ceiling problem arose. (Editing by Jacqueline Wong)
