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South Korea not fretting over US forex manipulation rule
[SEJONG] South Korea's vice finance minister said on Monday the country is not worried about new US laws that allow Washington to bar countries from US trade deals and government procurement contracts if they keep currencies artificially low.
"Our foreign exchange officials are currently carrying out their tasks in a balanced manner and offshore parties have agreed on this as well. We are not hugely concerned (about the legislation," Vice Finance Minister Choi Sang-mok said in a regular meeting with reporters in Sejong, south of Seoul. "We are explaining ourselves as much as we can through a number of ways."
The vice finance minister's comments came a few hours after the finance ministry said in a statement the government will conduct closer bilateral communication with the US on macro-economic policies. Subjects of communication include foreign exchange, which was discussed between the two nations during a recent meeting of finance ministers from the Group of 20.
The ministry's explanatory statement was released to address a local media report that cited an unnamed South Korean government official as saying US Treasury Secretary Jack Lew had expressed concerns over South Korea's forex policies to Finance Minister Yoo Il-ho. The finance ministry statement said this was untrue.
Currency dealers have suspected foreign exchange authorities have been stepping into the market frequently since late last year as turbulence in global markets increased after the US decided to raise interest rates for the first time in a decade in December.
The South Korean government and central bank's basic stance on foreign exchange rates is that authorities will take action via "market smoothing" measures in times of extreme price action, while leaving the general flow in line with global market movements.