affected by the massive depreciation of the korean won. but they have held broadly steady since this march. this can be put down to the stable movements of the exchange rate and international raw material prices, along with the depressed domestic demand. turning to the current account, we have seen a swing from a deficit of 8 billion dollars in 1997 to a large surplus of some 31 billion dollars for the first three quarters of this year. much of this improvement, though, must be attributed to the sharp reduction in imports, brought about by the subdued domestic demand, which has more than offset the effect of the decline in exports. foreign exchange and financial markets now let us move on to the foreign exchange and financial markets. helped by the large surplus on the current account and the conversion of most of the outstanding short - term foreign debt of financial institutions to long - term obligations, the foreign exchange market has stabilized substantially. usable foreign exchange reserves rose to 45 billion dollars at the end of this october, which was above the year - end target level of 41 billion dollars agreed as a conditionality element of the imf ’ s standby arrangements. since mid - march, the exchange rate has regained stability, moving in a range of some 1, 300 to 1, 400 won per us dollar. total foreign debt, as defined by the imf standard, has also been reduced by 4 billion dollars since the end of last year. it stood at 151 billion dollars at the end of this august, thanks largely to the considerable contraction in the foreign liabilities of the financial and private sectors. moreover, the environment for the rollover of outstanding borrowings by korean financial institutions has become markedly more favorable in the international financial markets. fresh foreign borrowings, though, are still not so easy. in step with the improved foreign exchange market conditions, the bank of korea has steadily reduced its market intervention rate from a high of around the 35 per cent level in december 1997 to its current 7 per cent. this has brought about a matching decline in market interest rates, particularly since it cut its repo rate by 1 per centage point on september 30. the overnight call rate is running at a level of 7 per cent and the long - term interest rate in terms of yields on corporate bonds is at the 10 per cent level, both lower than prior to the outbreak of the currency crisis. turning to money supply, the bank of korea has essentially maintained a stable monetary policy stance. but, when necessary, it has been prepared to

to put more emphasis on lending performance to small and medium enterprises. iv - concluding remarks the korean economy is now placed in an extremely difficult situation, where previous experience and received wisdom provide little guidance. however, all economic actors fully realize that in order to tackle the problems which led to the crisis, there is no alternative other than swift and intensive structural adjustment. and we are now resolutely and patiently fitting the blocks carefully together to build a sound new economy. the bank of korea will do its utmost to support this structural adjustment, while maintaining monetary stability. of course, to some foreigners, korea ’ s structural adjustment may appear inadequate or incomplete in some aspects. but may i ask you as informed commentators on the korean economy to have confidence in our resolute determination to carry out thoroughgoing structural adjustment. your counsel and advice in this process will be greatly appreciated.