Deputy Prime Minister and Minister of Finance and Economy Lee Hyeong-il commented on the situation where the won/dollar exchange rate has recently fallen to around 1,330 won, saying, “Currently, (the exchange rate) is in the process of finding economic fundamentals.”
Deputy Prime Minister Lee said at a press conference held at the Quin Sirikit Convention Center (QSNCC) in Bangkok, Thailand, where he was visiting on the 16th (local time) to attend the meeting of finance ministers and central bank governors of the G20 and G7 as well as the annual general meetings of the International Monetary Fund (IMF) and World Bank (WB), "The exchange rate in July went up to the 1,550 won range, and the situation at that time was actually ours. “I think it deviates from fundamentals,” he said.
The won/dollar exchange rate rose sharply, reaching 1,559.2 won in early July, but fell to 1,328.9 won on the 16th.
This is interpreted to mean that the exchange rate is converging in a direction consistent with the recent economic situation, as semiconductor companies and other companies are earning huge amounts of dollars thanks to strong exports.
During the meeting, regarding the contents of the first four-party (2+2) meeting with Bank of Korea Governor Shin Hyun-song, US Federal Reserve Chairman Kevin Worth, and US Treasury Secretary Francis Brook, he refrained from saying, "It is difficult to talk about it as we decided to discuss it in private."
Deputy Prime Minister Lee said, "Bilateral meetings are being held between the Ministry of Finance and the Central Bank, and discussing them together will have greater meaning," and added, "It will be of great help when various matters arise in the future."
Regarding the need for the Korea-U.S. currency swap, he said, “It is a meaningful and necessary part of a strong safety net for our country’s foreign exchange market.”
Earlier this year, the Ministry of Finance and Economy said, “We do not feel that there is a need for a currency swap right now.”
In relation to this, Deputy Prime Minister Lee said, "I am not asking for a swap because we are having a hard time right now because we do not have foreign currency liquidity. I think the intention was that since there was no problem with foreign currency liquidity at the time, it does not mean that we need a life jacket."
He then gave a basic answer, saying, “Now that our economic structure has grown, we need a currency swap at the level of developed countries,” and “(if there is a Korea-US currency swap), it will be a strong defense shield for our economy.”
Regarding the recent domestic stock market volatility, he diagnosed, "It seems to be adjusted when there are concerns that global interest rate rises may become more frequent than expected, questions about whether artificial intelligence (AI) and semiconductor investment profitability will last as long as expected, and geopolitical risks such as the Middle East."
“But I would like to say that the growth (of the Korean economy) is very good,” he said. “Right now, investment is leading the way, but over time, that growth will transfer to consumption, and considering the large current account surplus, I think the basic conditions of our economy and stock market are still solid.”
When asked whether measures such as the injection of a stock stabilization fund or a temporary suspension of short selling could be implemented if stock market volatility further expands, the company responded, "We are always monitoring the market situation and preparing to take the market stabilization measures we have if necessary," but added, "What measures to take will be tailored to the situation."
Recently, a former member of the Financial Services Commission was selected as the first vice minister of the Ministry of Finance and Economy, and the Financial Services Commission is expected to be relocated to Sejong. When asked about the possibility of expanding cooperation with the Financial Services Commission or further reorganizing the organization, he responded, "It is currently going well, but I think it will do even better with the arrival of Vice Minister Kwon Dae-young."
However, he refrained from saying anything about the reorganization plan, saying it was “difficult to talk about.”
