China's devaluation of its currency is expected to have a positive impact on the South Korean economy if it leads to increased exports for Beijing, Seoul's finance minister said Wednesday.
  

In an apparent bid to boost its exports, China's central bank devalued the yuan for the second day in a row, causing ripples of repercussion around the world.
  

Speaking to reporters following a meeting of economy-related ministers in Seoul, Finance Minister Choi Kyung-hwan said a weak yuan can actually help South Korea at this juncture.  
  

"Beijing's move seems to be aimed at reviving its export competitiveness," the finance minister said. "If Chinese exports increase, it can lead to more demand for locally made intermediate goods."
  

Chinese companies buy parts, components and materials from abroad and assemble them for export. South Korea has been one of the leading suppliers of intermediate goods, but its outbound shipments have contracted by 5.1 percent on-year in the first half, mainly due to drop in demand from China.
  

Choi, who doubles as deputy prime minister for economic affairs, said South Korea and China do not really compete fiercely in the finished goods market, so any fallout of cheaper Chinese goods should not be too serious.
  

Locally made products have greater value added than those made in China.
  

Choi, however, said the government is keeping close tabs on the foreign exchange market.
  

He said Beijing's decision comes at a time when the United States may hike up interest rates, the anticipation of which is contributing to greater volatility in the market.
  

Related to the yuan's devaluation, South Korean government officials predicted that the Chinese currency may continue to weaken.
  

They said that while there are concerns, the impact may not be severe since the Korean won and other major Asian currencies are following the same path.
  

"For the time being, there should not be any sharp exodus of foreign capital from South Korea," an official said. "Worries, particularly, those coming from the stock market, may be overblown." (Yonhap)