August 13, 2022

S. Korea to take action against excessive currency volatility: finance minister

Finance Minister Choo Kyung-ho, who also serves as deputy prime minister for economic affairs, speaks during a press conference at the Sejong government complex in central South Korea on Monday. (Yonhap)

South Korea is ready to take appropriate action in response to any unilateral moves in the local foreign exchange market, the country’s top financial policy official said on Monday in his latest remarks apparently aimed at allaying growing market anxiety. amid aggressive monetary tightening and US concerns. on the global recession.

“Relevant authorities will take appropriate action in case there is a unilateral movement in the market due to anxiety,” Finance Minister Choo Kyung-ho told reporters.

The minister, however, declined to comment on what would constitute an appropriate won-dollar exchange rate range, saying such remarks could cause misunderstandings in the market.

The local currency lost ground against the US dollar as investors’ appetite for risk waned amid global inflation and recession. On Monday, the won fell to an intraday low of 1,295.3 won against the greenback for this year.

Last week, the Fed raised its interest rate by 0.75 percentage points, the first such steep rate hike since November 1994. Concerns are growing that the US central bank may continue to press for further steep rate hikes on the road to reining in the highest inflation in about four decades.

In a verbal intervention to forestall further declines in the won ahead of the Fed’s rate decision, the Finance Ministry said last week that authorities would take steps to stabilize the foreign exchange market, if necessary. (Yonhap)