The South Korean government on Sunday said the ongoing debt problem in Dubai will have a "limited" impact on the country, but it should be closely monitored.

The conclusion came after the country's two financial watchdog bodies -- Financial Services Commission and the Financial Supervisory Service -- held an emergency meeting later Sunday to assess the fallout from the Dubai debt crisis and discuss ways to deal with any possible impact on the country's financial markets.

Kwon Hyouk-se, vice chairman of the Financial Services Commission, said at the meeting that the impact of the crisis will be "marginal" as the country's exposure to Dubai stood at a minimal scale, and its financial markets and economy are in good shape compared to the other countries.

According to a press release by the Financial Supervisory Service, South Korean financial institutions' exposure to Dubai amounted at US$88 million, which is only 0.4 percent of all external credit of US$52.8 billion, as of the end of September.

Of the total amount, exposure to Dubai World estimated at US$32 million, it added.

Kwon said there is a broad opinion that the crisis in Dubai would not likely turn into a risk for the global financial system as the collapse of Lehman Brothers last year. But he warned that as uncertainties still remain over global economic recovery, while the country's financial market has yet fully recovered, the government will keep a close eye to the issue to stave off a possible market turmoil.

The financial authorities will pay close attention to both domestic and international financial markets, especially assessments on the country's financial market made by international credit rating agencies and foreign investment banks, the official added.

On Wednesday, Dubai World, a state-owned holding company in the United Arab Emirates, called for a six-month repayment moratorium on its debts of around US$60 billion, which lead the South Korean markets tumbled on Friday with share prices and the foreign exchange rate plunging and bond prices soaring.

(Xinhua News Agency November 30, 2009)