The government is preparing to devise measures to stabilize the foreign exchange market in consultation with the National Pension Service and major exporters, the country's finance chief said Friday, as the South Korean won has continued to weaken against the US dollar.
Following the remarks by Finance Minister Koo Yun-cheol on the need to actively mobilize all available policy tools, the local currency, which had fallen to a seven-month low the previous day, rebounded sharply, rising nearly 1 percent to trade at around 1,457 won per dollar.
Koo made the comments in a macroeconomic policy meeting attended by Bank of Korea Gov. Rhee Chang-yong, and the heads of the Financial Services Commission and Financial Supervisory Service, according to the Ministry of Economy and Finance.
The ministry said the participants expressed concern over the growing uncertainty in the FX market and agreed on the need to "improve the structural imbalance in foreign currency supply and demand."
They also shared the view that if FX imbalances stemming from overseas investment persist, expectations of a weaker won among market participants could become entrenched, significantly affecting downward rigidity in the exchange rate, the ministry said.
The policymakers also emphasized the need to actively use available policy tools to respond to such risks.
The financial and foreign exchange authorities plan to closely analyze the drivers behind the won's depreciation and work with major market participants, including the NPS and major exporters, to devise measures to stabilize the exchange rate, the ministry said.
In October, the finance ministry issued a similar message, saying that the authorities will closely monitor the FX market with a sense of "vigilance" amid increasing volatility. (Yonhap)
