Exchange Rate Surpasses 1,560 Won... Koo Yoon-chul Vows Firm Action Against Speculative Trading

Government Holds Market Situation Review Meeting

Koo Yoon-chul, Deputy Prime Minister and Minister of Economy and Finance, is chairing the Market Situation Review Meeting held at the Korea Federation of Banks in Jung-gu, Seoul, on the 7th. Ministry of Economy and Finance

The government has decided to strictly monitor for speculative activities and potential market-disrupting behavior that may be taking advantage of the recent weakness of the won in the foreign exchange market, and to take firm action if any such activities are detected through the Bank of Korea, the Financial Supervisory Service, and other relevant agencies.

According to the Ministry of Strategy and Finance on June 7, Koo Yoon-chul, Deputy Prime Minister and Minister of Strategy and Finance, held a joint “Market Situation Review Meeting” with related agencies at the Seoul Government Complex. He stated, “While the recent increase in exchange rate volatility is partly due to supply and demand factors such as foreign investors adjusting their portfolios and taking profits in response to the strong performance of the domestic stock market, certain speculative trading has accelerated the herd behavior.”

He went on to say, “Excessive exchange rate volatility, as seen recently, is not desirable for our economy, and we will not tolerate excessive fluctuations or one-sided herd movements.”

The government explained that the concentration of trading through offshore NDF (Non-Deliverable Forward) derivatives has been affecting Korea’s foreign exchange market. The government plans to closely analyze this phenomenon and enhance transparency in NDF trading. In particular, measures will be developed to absorb offshore NDF activity into Korea’s domestic foreign exchange market (DF trading).

In addition, the government will investigate whether exporters and importers are engaging in illegal transactions by accelerating payment for imports or excessively delaying receipt of export proceeds in response to the rising exchange rate. This investigation will be conducted by a task force against illegal foreign exchange transactions, which includes the Ministry of Strategy and Finance, the National Intelligence Service, the National Tax Service, the Korea Customs Service, the Bank of Korea, and the Financial Supervisory Service.

During after-hours trading on June 5, the won-dollar exchange rate surged to an intraday high of 1,561.5 won. This was the highest intraday level recorded in 17 years and 3 months, since March 6, 2009 (when it reached an intraday high of 1,597.0 won) during the global financial crisis.

Deputy Prime Minister Koo stated, “Given that market volatility could increase again depending on developments in the Middle East conflict and U.S. inflation trends, we will maintain a high level of vigilance around the clock, closely monitor market conditions, and promptly implement the measures prepared today in cooperation with relevant agencies.”

Meanwhile, the participants agreed that, with the significant expansion of Korea’s stock market—driven by the competitiveness of key industries such as semiconductors—the impact now extends beyond the foreign exchange market to the broader macroeconomy and financial system, including public finance and the real economy. As a result, they decided to strengthen the comprehensive risk management system to enhance macroeconomic soundness.

This content was produced with the assistance of AI translation services.