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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] The South Korean government has vowed to take strict action against speculative trading and market-disrupting activities in the foreign exchange market, as the Korean won recently weakened to around 1,560 per U.S. dollar.
Authorities believe that, in addition to external factors such as rising geopolitical tensions in the Middle East and expectations of further U.S. interest rate hikes, speculative transactions have contributed to the recent depreciation of the won.
The government also plans to implement market stabilization measures, including enhancing transparency in offshore non-deliverable forward (NDF) trading and investigating potential illegal foreign exchange transactions by exporting and importing companies.
According to the Ministry of Economy and Finance, Deputy Prime Minister and Finance Minister Koo Yun-cheol convened an emergency joint meeting on market conditions on June 7 at the Korea Federation of Banks building in Seoul. The meeting reviewed recent developments in domestic and global financial and foreign exchange markets and discussed response strategies.
The meeting was attended by Shin Hyun-song, Lee Eok-won, and Lee Chan-jin.
Participants assessed that South Korea’s economic fundamentals and external credibility remain solid, citing improving earnings outlooks in the semiconductor sector and a widening current account surplus.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
