Korea to take swift action for weakening won against dollar

As the won-dollar exchange rate broke through the 1,400-won mark, a psychological threshold, the authorities verbally intervened, saying that “aggressive market stabilization measures should be implemented in a timely manner.”

The authorities' intervention brought the exchange rate down briefly, but it has remained in the 1,400-won range since Donald Trump's re-election.

“There are uncertainties regarding global economic growth, price flows, and the monetary policy stance of major countries, along with the new US administration's policy shift,” said Choi Sang-mok, Deputy Prime Minister cum Minister of Strategy and Finance, at the “Emergency Meeting on Macroeconomic and Financial Issues” hosted by the Bank of Korea in Seoul on November 14, adding that the government will closely monitor the market situation with special nervousness, centering on a 24-hour joint inspection system among relevant agencies. “We will do our utmost to maintain the coordination and response system in accordance with the Contingency Plan, and if volatility in the financial and foreign exchange markets escalates excessively, we will swiftly implement active market stabilization measures in a timely manner,” Choi said. The verbal intervention comes nearly seven months after the exchange rate rose to around 1,400 won in mid-April amid unrest in the Middle East.

The won-dollar exchange rate hovered around the 1370-won level for the past five days but has risen daily since Trump's election, even exceeding 1410 won during intraday trading. Today's verbal intervention by the authorities has calmed the exchange rate somewhat.

The won-dollar closing exchange rate at 3:30 p.m. was 1,405.1 won, down 1.5 won from the previous day. This is the first time in four trading days that the won-dollar exchange rate has fallen on a weekly closing basis since the 8th.

“We expect a short-term strong dollar impact from the U.S. presidential election through the end of the year,” said Moon Da-woon, a researcher at Korea Investment & Securities, but “upward pressure above 1,400 won will be limited due to the alertness over authorities’ intervention and high levels of burden.”

The meeting was attended by Bank of Korea Governor Rhee Chang-yong, Chairman of the Financial Services Commission Kim Byung-hwan, Secretary-General of the Financial Services Commission Park Chun-seop, and Financial Supervisory Service Senior Vice Chairman Lee Se-hoon. The Ministry of Economy and Finance revealed the meeting shared the perception that volatility is excessive in the transitional period before the new U.S. administration takes office, due to uncertainty over changes in policy stance.

※This article has undergone review by a professional translator after being translated by an AI translation tool.