He is the right person to maintain economic reform policy

Government spokesman

Foreign investors had expressed concern that Mr Jin's departure could lead to a change in South Korea's economic policies.

It is a crucial time for the country's economy which is making a fast recovery in the aftermath of the 1997-1998 Asian financial crisis that forced the country to appeal for help from the International Monetary Fund.

But the sales of debt-stricken Daewoo Motor Company and computer-chip manufacture Hynix have yet to go ahead.

A government spokesman said the reformist policy introduced by Mr Jin would be continued by Mr Jeon, who also gets the title of deputy prime minister.

Jin Nyum was credited with bringing South Korea's economy back from the brink

"He is the right person to maintain economic reform policy," the spokesman said.

Analysts agreed that Mr Jeon's appointment would not cause any upset.

Kim Seok-jung, head of research at Kyobo Securities, told the Reuters news agency: "It will not likely have an impact on the market - it had been expected to some extent.

"With the term of Kim Dae-jung's administration running out, he will be restricted in taking new directions in government policy."

Corporate reformer

Lee Sang-jae, chief economist for Hyundai Securities, said he did not expect much change in overall policy given the sluggish export situation.

"But he may seek ways to curb robust domestic consumption as current credit easing policy has raised concerns that a slew of default cases may be reported in the household sector," he said.

"Jeon will also be aggressive in pushing privatisation and addressing issues of troubled companies as he has experience heading corporate reforms as a former Fair Trade Commission chief."

A career technocrat, Mr Jeon served in various economic posts for 36 years before being named the presidential chief of staff in January.

Park Jie-won, 60, a former culture and tourism minister and now a presidential secretary for policy and planning, succeeded Mr Jeon as the presidential chief of staff.