Finance Minister Koo Yun-cheol chairs an emergency meeting on reviewing the volatile foreign exchange market at the Korea Federation of Banks in Seoul, Sunday. Courtesy of Ministry of Finance and Economy
Top economic and financial policymakers on Sunday pledged to take stern action against market-disruptive activities and speculative trading amid a weakening Korean won.
Finance Minister Koo Yun-cheol and other heads of financial authorities made the joint remarks during an emergency meeting on reviewing the volatile foreign exchange market, according to the Ministry of Finance and Economy.
The meeting was attended by Bank of Korea Gov. Shin Hyun-song, Financial Services Commission (FSC) Chairman Lee Eog-weon and Financial Supervisory Service (FSS) Gov. Lee Chan-jin.
The Korean won has fallen to its weakest level against the U.S. dollar since 2009 in recent days, due mainly to heavy net selling of foreign investors amid fading expectations of a diplomatic solution to the war in the Middle East.
On Friday, the won was quoted at 1,539.1 won per dollar at 3:30 p.m., down 9.4 won from the previous session, marking the weakest level since March 9, 2009.
The finance ministry said participants expressed concerns that heightened market volatility could weigh on the Korean economy, adding, “We will not tolerate excessive volatility or one-sided market concentration.”
The officials also agreed to investigate whether speculative activities are capitalizing on the weakening won or whether there have been attempts to disrupt the market, through inspections conducted by the BOK and the FSS, and to take strict measures based on the findings.
Authorities said they are closely monitoring transactions that disrupt market functions or distort price discovery, as well as one-sided trades executed at specific times and in volumes exceeding customer orders in an attempt to manipulate prices to customers’ disadvantage
“Given that market volatility could rise again depending on developments in the Middle East war and U.S. inflation trends, we will monitor market conditions with high vigilance around the clock,” Koo said. “We will work with relevant agencies to swiftly implement countermeasures.”
