S. Korea vows to take strict action against excessive volatility in FX market
Quick Look
South Korea's financial authorities pledge to combat excessive volatility in the foreign exchange market, blaming speculative transactions like NDFs for the won's sharp decline against the USD, despite strong economic fundamentals.
AI-generated summary
Why It Matters
South Korea's economy faces pressure from a weakening KRW despite a record current account surplus.
SEOUL, June 8 (Yonhap) -- Financial authorities on Monday vowed to take strict action against excessive volatility and one-sided movements in the foreign exchange market amid the weakening Korean won. "We assess that, in addition to supply and demand factors, certain speculative foreign exchange transactions, such as non-deliverable forwards (NDFs), have recently contributed to increased volatility in the foreign exchange market," a joint statement from the Ministry of Economy and Finance and the Bank of Korea said. "We will not tolerate excessive volatility relative to economic fundamentals or one-sided market movements, and we will respond firmly to such situations." ... (rest of the article preserved verbatim with paragraph breaks)
What to Watch
AI outlook — possibilities, not facts
KRW may stabilize if authorities successfully curb speculative transactions
Likely · Within weeks
Open Questions
- What specific measures will be unveiled to reduce NDF reliance?
