Deputy Prime Minister and Minister of Finance and Economy Koo Yoon-cheol presides over a Market Situation Review Meeting at the Government Complex Seoul in Jongno-gu, Seoul, on the 4th. Courtesy of the Ministry of Finance and Economy

Deputy Prime Minister and Minister of Finance and Economy Koo Yoon-cheol said on the 4th, regarding the growing exchange-rate volatility, that “we will take necessary measures immediately in the event of excessive one-sided moves.”

Koo made these remarks at a joint ‘Market Situation Review Meeting’ of relevant agencies held at the Government Complex Seoul that day. That day, the won-dollar exchange rate began trading in the 1,530-won range. It was the first time in 17 years and three months since March 10, 2009 (1,554.0 won), during the financial crisis, that the rate opened above 1,530 won. It was also the first time in about two months, since March 31, that it topped 1,530 won during intraday trade. The high then was 1,536.9 won.

Koo cited factors such as foreign investors’ equity weight adjustments (rebalancing) as drivers of the broader exchange-rate volatility. He added, “In a situation of high external uncertainty, we are keeping a high level of vigilance and closely monitoring to prevent anxiety from spreading.”

He also voiced concern about the rise in government bond yields. Koo said, “A combination of factors, including inflation concerns and strengthened expectations of domestic rate hikes, is at work,” adding, “Based on close communication with market participants, the relevant authorities will coordinate and respond in a timely manner in the event of excessive volatility.”

As for the recent economic situation, he assessed that May exports totaled $87.75 billion, up 53.2% year-on-year, and that the stock market’s market capitalization overtook India’s to rank sixth, indicating that overall momentum remains solid.

However, given the recent increase in stock trading through borrowing, such as margin financing, the authorities decided to regularly review related trends through the Market Situation Review Meeting and to make thorough, preemptive efforts in risk management and investor protection.