Finance Minister Koo Yun-cheol on Friday stressed the need to actively mobilize all available policy tools to cope with rising uncertainty in the foreign exchange market, as the South Korean won has continued to weaken against the US dollar, the finance ministry said.
On Thursday, the local currency slid to around 1,470 won per dollar, nearing its weakest level of the year, weighed down by heavy stock selling by foreign investors and a weaker Japanese yen.
Koo made the remarks in a macroeconomic policy meeting attended by Bank of Korea Governor 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 National Pension Service and major exporters, to devise measures to stabilize the exchange rate, the ministry said. (Yonhap)
