The South Korean economy received a boost from the latest auction of the Korea Asset Management Corporation (KAMCO) last month. The state agency charged with cleaning up the domestic banking sector sold W1.04 trillion ($816 million) of bad loans to U.S. private equity fund Lone Star Fund for a better-than-expected average price of 50 cents on the dollar.

The agency sold 8,100 loans backed by retail and residential properties, raising $455 million. The sale reinforces the bright outlook for Korea's economy, which looks to be staging a remarkable recovery after experiencing its worst post-war recession in 1997 and 1998.

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