Headline: Seoul Signals FX Support as Won Hits Seven-Month Low
South Korea’s currency authorities have pledged to act to stabilise the won after it slid to its weakest level in seven months, intensifying concerns about heightened currency volatility and tightening dollar liquidity.
Following a sharp drop that pushed the exchange rate beyond ₩1,470 per US dollar, the finance ministry warned against rapid depreciation and flagged a persistent imbalance between domestic demand and supply of dollars. Dealers suspected that authorities had already sold dollars to steady the market. Finance Minister Koo Yun-cheol said senior economic officials agreed to prepare measures aimed at addressing the structural pressures behind the move.
Officials pointed to a surge in overseas investment by Korean residents as one factor weighing on the currency. The won briefly touched 1,475.4 per dollar, its weakest level since April, amid broader uncertainty linked to a US$350 billion investment package associated with a trade arrangement with the United States. In response, the government plans to discuss stabilisation options with the National Pension Service—one of the world’s largest pension funds and a key driver of outbound flows—as well as with major exporters. The won strengthened sharply after the ministry’s statement and market speculation about intervention.
Key Points – South Korea vows to stabilise the won after it hit a seven-month low. – Authorities warned about rapid depreciation and dollar funding imbalances. – Dealers suspect official dollar sales followed the ministry’s comments. – Won weakness partly attributed to increased overseas investment by residents. – Exchange rate briefly reached 1,475.4 per dollar, the weakest since April. – Government to consult the National Pension Service and large exporters on stabilisation tools.
