The South Korean government and central bank will act “aggressively” against excessive one-sided movement in the foreign exchange rate, fiscal and monetary policy chiefs said on Wednesday.
Deputy Prime Minister and finance minister Kim Dong-yeon and Bank of Korea Governor Lee Ju-yeol told reporters after their breakfast meeting that the finance ministry and central bank maintain the same position that they should act decisively should the exchange rate tilt too much in one direction.
“The foreign exchange rate should be decided by the supply and demand in the market. But it is our principle to act aggressively if there is too much slanting to one side,” Lee said.
The rare synchronized verbal intervention comes after the won has passed the 1,060 milestone in the new year for the first time in three years. The won appreciated 14 percent last year against the U.S. dollar.
But market participants do not expect heavy won-selling intervention from authorities as Seoul is included in U.S. Treasury Department monitoring list of countries for currency manipulation and due to start negotiation to amend terms in the bilateral free trade deal with Washington.
The dollar was down 2.3 won on Thursday at 1,062.20 won.
By Sohn Il-seon and Kim Hyo-jin
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]