The South Korean won has declined to its weakest point since 2009, even though government officials have pledged to curb excessive volatility in the currency market.
Finance Minister Choo Kyung-ho stated on Thursday that authorities are monitoring the foreign exchange market with a high degree of vigilance to prevent the spread of unease. He added that necessary measures would be taken swiftly if excessive market fluctuations occur.
However, the minister's remarks failed to halt the won's slide, underscoring the need for more robust action. High oil prices are harming importers across the region, prompting authorities in Indonesia and the Philippines to also intensify efforts to defend their respective currencies.
So Jaeyong, chief economist at Shinhan Bank, noted that while authorities are doing what they can, controlling the exchange rate is quite challenging as the won's movement is primarily driven by external factors.
In an emailed statement following a regular meeting with officials including the Bank of Korea governor, Choo Kyung-ho also stated the government would closely monitor the bond market and respond quickly to any excessive volatility by maintaining close communication with market participants.
The yield on South Korea's 3-year government bond rose by 9 basis points to 3.86%. The country's financial markets were closed on Wednesday due to local elections.
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