FX Authorities' Verbal Intervention: "Speculative Trades Like NDF Will Not Be Tolerated; Strong Response Promised" (Update)

The foreign exchange authorities have issued a strong message, stating that they will respond firmly to excessive volatility and one-sided movements compared to fundamentals.

In the dealing room of the Hana Bank headquarters in Jung-gu, Seoul, the exchange rate, KOSPI, and KOSDAQ indices are displayed on the index board.

At around 11:45 a.m. on June 8, the foreign exchange authorities released a statement under the names of Yoon Kyungsu, Director General of the International Department at the Bank of Korea, and Lee Hyunglyul, Director General of the International Finance Bureau at the Ministry of Economy and Finance. The statement said, "Recently, in the foreign exchange market, we believe that not only supply and demand factors but also some speculative foreign exchange transactions, such as offshore non-deliverable forward (NDF) trades, have increased volatility. We will never tolerate excessive volatility and one-sided movements compared to fundamentals and will respond strongly."

Following the authorities' verbal intervention, the rise in the won-dollar exchange rate slowed significantly. As of 11:51 a.m. in the Seoul foreign exchange market, the won-dollar exchange rate was trading at 1,547.1 won. On this day, the rate opened at 1,555.2 won, up 16.1 won from the previous trading day's weekly closing price. During the morning session, it narrowed its gains to fall below the 1,550 won level at one point, but then the upward momentum strengthened, pushing it back above 1,553 won. Immediately after the verbal intervention, the rate pared its gains to 1,545.1 won.

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