South Korea’s finance minister warned that officials are on high alert for speculative trading and herd-like moves in the FX market, stressing that authorities will deliver a “stern response” to any excessive volatility. Speaking at a press briefing, Minister Koo Yun-cheol said the won is reacting more sharply to uncertainty than other major currencies, driven partly by domestic structural factors and rising expectations for further weakness.
Koo confirmed the government has been meeting with local brokerages to discuss FX stability and is also in contact with the National Pension Service (NPS), though no measures have been agreed. He stressed that the NPS will not be directed to intervene to support the won, adding that FX-hedging decisions for the fund’s dollar purchases remain the responsibility of its internal decision-making body.
The ministry is monitoring sharp increases in overseas equity buying by local residents, but Koo offered no new action plan at this stage. Instead, he reiterated that all policy options remain on the table should market conditions worsen.
This article was written by Eamonn Sheridan at investinglive.com.