Foreign Exchange Authorities' Verbal Intervention Amid Currency Surge: "Speculative Factors Will Be Examined"

On the morning of the 23rd, the USD/KRW exchange rate is displayed on the status board in the dealing room of the Hana Bank headquarters in Euljiro, Jung-gu, Seoul. [Image source=Yonhap News]

As concerns over interest rate hikes by the U.S. Federal Reserve (Fed) caused the won-dollar exchange rate to rise sharply, the foreign exchange authorities intervened verbally for the first time in over two months.

An official from the foreign exchange authorities stated at around 9:24 a.m. on the 23rd, "We will closely examine whether there are speculative factors, mainly in offshore markets, contributing to the rise in the won-dollar exchange rate amid the recent global dollar strength."

This marks the first official verbal intervention by the foreign exchange authorities since June 13.

On that day, in the Seoul foreign exchange market, the won-dollar exchange rate opened at 1,341.8 won per dollar, up 2.0 won from the previous day's closing price, and showed instability by rising to the mid-1,340 won range in the early trading hours.

After the intervention by the foreign exchange authorities, the rate fell to the 1,339 won range and has been fluctuating slightly since.

On the same day, President Yoon Suk-yeol said during a Q&A on his way to the Yongsan Presidential Office, "I believe the public is very worried about the exchange rate soaring to 1,340 won," adding, "We will manage risks well through emergency economic measures meetings to ensure that the strong dollar and weak won currency situation does not negatively affect our market."