You are here
South Korea finance minister says ready to intervene if forex moves become disorderly
[SEOUL] South Korea's finance minister said on Thursday recent movements in the dollar-won exchange rate warrant close observation by the government and officials are ready to step in if price moves become too exaggerated.
Finance Minister Yoo Il-ho was speaking to reporters on the sidelines of an economic event in Seoul as the Korean won closed onshore trade at 1,227.4 against the dollar, hovering near 5-1/2 year lows versus the greenback.
"The won seems to be moving in one direction - down. The situation is difficult," Mr Yoo said. "Our stance is that the exchange rate will basically be left to markets, but if movements become extreme we are ready to step in."
The minister also played down concerns that recent outflows in local stocks and bonds were developing into a permanent trend. "It is difficult to say the outflows we have been seeing in stocks and bonds have become a firm trend. Recent movements in global financial markets have been very skewed," said Mr Yoo.
Foreigners have been unloading South Korean stocks and bonds since late last year, extending a selloff sparked by a rate hike in the United States in December. However, a government official told Reuters there have been continuing bond inflows from foreign central banks.
In his speech at a seminar earlier in the day, the minister said South Korea is in a better footing than during the 1997-1998 Asian financial crisis and the more recent global financial tumult in 2008-2009.
He singled out the United States and China as the biggest risks to the domestic economy, but didn't elaborate on where the hazards lay.
Mr Yoo said external uncertainties have been rising in recent months, adding that private consumption has eased slightly and the real estate market appeared to be in a correction after showing robust activity last year.