In other words, one of Korea’s last ditch measures to defend its currency would be to sell its remaining Freddie and Fannie debt, but the lack of liquidity argues against that.
Just like many other Asian countries, Korea built up big dollar reserves. But now that they need their dollar denominated assets, they can’t use them for fear of having to sell them at fire sale prices. I think a lot of other countries who are building up huge dollar reserves on the premise that it will safe guard them from future problems are going to find themselves in the same boat.