- South Korea is reviewing "contingency plans" related to foreign exchange volatility, the Financial Times reported Thursday.
- The verbal intervention by Finance Minister Choo Kyung-ho took place as the dollar hit a fresh 13-year high against South Korea's won.
South Korea said Thursday it was monitoring the rapid ascent of the US dollar's value against its own currency, with the verbal intervention taking place as the won hit a fresh 13-year low against the greenback.
South Korea is reviewing "contingency plans" related to foreign exchange volatility, Finance Minister Choo Kyung-ho said in a parliamentary session, the Financial Times reported. Choo said authorities would take measures to tackle excessive volatility.
The dollar on Thursday rose to highs not seen since March 2009 against South Korea's currency. The greenback gained 0.6% to buy 1,399 won. The dollar has climbed about 18% against the rival currency during 2022.
Choo's remarks followed those made by Bank of Korea Governor Rhee Chang-yong in late August. According to CNBC, Rhee said there was a "high chance of increased volatility" in the foreign exchange market whenever the US Federal Reserve issues a monetary policy decision.
The dollar has stepped higher against many currencies this year largely as the Federal Reserve has been aggressively raising interest rates to tame soaring inflation by slowing economic activity. The Fed next week is expected to deliver its fifth rate hike of the year.
Won weakness, meanwhile, has pushed up inflation in South Korea, which imports about 94% of its energy and natural resources, according to Korea's Ministry of Foreign Affairs. The country in 2022 is on course to record its first annual trade deficit since 2008 as the growth of its exports has slowed while its import costs have swelled with energy prices soaring worldwide in the wake of Russia's war against Ukraine.
South Korean inflation hit a more than two-decade high this year although the rate slowed to 5.7% in August.
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