By Christine Kim

SEOUL, Jan 28 (Reuters) - A South Korean central bank policy board member delivered a sharp warning on Monday about a possible surge in capital inflows, adding to a chorus of complaints from Seoul over the ultra-loose monetary policies adopted by advanced economies.

'An atmosphere of protectionism is spreading and South Korea needs to take a much more serious view about this,' Ha Sung-keun, a member of the Bank of Korea's 7-member monetary policy committee, told reporters. Ha said his remarks did not reflect the view of all the committee members.

The won extended early losses after the remarks, suffering its biggest daily fall against the U.S. dollar in 16 months, as traders speculated the government was planning further measures to curb its strength and better control capital flows.

Speaking at a scheduled luncheon with reporters, Ha was referring to the quantitative easing policy measures taken by the advanced economies, most recently by Japan.

The comments, which were the strongest rhetoric from a South Korean policymaker against unconventional easing methods in recent months, came just two days after the central bank's governor Kim Choong-soo said Japan's monetary easing had 'created problems.'

'What they did created a couple of problems,' Kim said in an interview at the World Economic Forum in Davos on Saturday. 'One is that the level (of the currency) is affected, and the pace of change is also a problem. They did it too hastily.'

Talk about a currency war has dominated discussions at the forum in Davos, with many central bankers and business executives questioning the wisdom of continuing an easy money policy.

Central bank board member Ha also said on Monday that the country's existing measures on capital flows were not sufficient, although he said they were in better shape than before.

Ha stressed the need for caution over excessive and potentially destabilising capital inflows, in line with policymakers' repeated warnings about the volatility of the won since the third quarter of last year, which Korean officials fear will hurt exporters and jeopardise an expected economic recovery.

But Hyundai Futures foreign-exchange analyst Lee Dae-ho said that the won's decline in the past few days has pushed back the timing of any new regulatory measures on the foreign-exchange market.

'I don't think there will be new steps announced in the near term, and there aren't any particularly good options at this point to begin with,' he said.

The won ended down 1.7 percent against the dollar, while March futures on three-year treasury bonds briefly rose on hopes that the central bank will cut interest rates again to dampen interest in the won and spur the economy.

The won rose 7.6 percent against the dollar last year as a result of capital inflows from advanced countries, which was the most since 2009. It also set its biggest percentage gain against the Japanese yen since 1998, crimping South Korean exporters' competitiveness against their Japanese rivals.

The won forcefully extended its 2012 gains early in the new year, rising more than 1 percent by mid-month before a series of official warnings and repeated interventions by foreign exchange authorities slowed its climb.

In regards to the domestic and global economy, the board member said overall sluggishness was likely to be drawn out and the recovery would be slow, noting that imbalances among sectors at home was a serious concern.

The Bank of Korea's monetary policy committee left interest rates unchanged at 2.75 percent at its last meeting earlier this month, and most analysts expect it will make another cut soon to follow prior cuts made last July and October.

(Additional reporting by Se Young Lee; Editing by Choonsik Yoo & Kim Coghill) Keywords: KOREA ECONOMY/CURRENCY

(christine.kim@thomsonreuters.com)(822 3704 5665)(Reuters Messaging: christine.kim.thomsonreuters.com@reuters.net)

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