Anchor: Higher expectations that the U.S. Federal Reserve may hike interest rates next month sent tremors through South Korean financial markets on Monday. But a U.S. financial expert says there is no need to overreact as South Korea has room to alleviate any potential impact of a rate increase.
Our Kim In-kyung has more.
 
Report: South Korea's secondary KOSDAQ market and the local currency tumbled on Monday after stronger-than-expected U.S. jobs figures boosted the likelihood of a U.S. rate hike in December.
 
The tech-laden KOSDAQ, which had seen huge gains this year on ample liquidity, lost more than three percent.
 
On the Seoul foreign exchange market, the local currency weakened one-point-three percent, or 15-point-three won, against the U.S. dollar as an increase in U.S. interest rates means that the greenback will get more expensive. 
 
Korea Society President Thomas Byrne, who was formerly senior vice president at Moody's Investors Service, however, said financial markets are overreacting.
 
[Sound bite: Korea Society President Thomas Byrne (English)]
"Koreans love to worry... Relative to the rest of the world, Korea, I think, looks pretty good. Korea has strengthened a lot during the two crises."
 
The financial expert said South Korea has room to strengthen its financial and monetary policies to ease the impact of a U.S. rate increase.
 
He added that South Korea has a considerable amount of foreign exchange reserves and is also a net creditor, with more overseas assets than foreign debt.
 
Nevertheless, Byrne said a simultaneous slowdown in China and a rise in U.S. interest rates as well as a surge in South Korea's household debt are risk factors, requiring policy moves.
Kim In-kyung, KBS World Radio News.