South Korea Finance Minister Vows Swift Response to FX Volatility

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South Korea will implement measures to address increasing volatility in the foreign exchange market and find ways to resolve an imbalance in dollar demand and supply, the country's finance minister said on Wednesday.

South Korea FX volatility measures are set as the won hits its weakest since December amid a foreign exchange market imbalance. Authorities plan actions to manage dollar demand and supply in South Korea, addressing market pessimism and pension fund impacts.


"Recently, despite record-high current account surpluses, volatility is increasing in the foreign exchange market with one-sided trading," Finance Minister Koo Yun-Cheol said in remarks prepared for a discussion forum on currency market policies.

On Wednesday, the won hit its weakest since December 24 at 1,479.2 per dollar, extending losses for an 11th consecutive session.

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At the forum, Kwon Yong-o, head of the Bank of Korea's international finance research team, said it was desirable to introduce policy measures to counter "excessively pessimistic" market sentiment. Kwon added that the won's current position in the upper 1,400 range did not align with economic fundamentals.

The authorities attributed the recent imbalance in dollar demand and supply to rapidly expanding overseas securities investments.

Koo said the government planned to speed up discussions about the national pension fund's impact on the currency market, and accelerate policy changes to win an upgrade to developed-market status.

Source: https://www.channelnewsasia.com

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