Post by : Shakul

South Korea has confirmed that it is maintaining close communication with Japan and other major allies on foreign exchange issues as concerns grow over the weakness of the South Korean won. Officials say cooperation is aimed at ensuring stability in the currency market amid rising global financial uncertainty.

Vice Finance Minister Huh Chang, who oversees foreign exchange policy, said the won is currently trading at levels that do not accurately reflect South Korea's economic fundamentals. He added that authorities are closely monitoring market conditions and remain prepared to take action if excessive volatility develops.

Government Watches Currency Markets

Huh said the government is working closely with Japan and other partner countries by regularly exchanging information on foreign exchange developments. However, he did not comment on whether any coordinated market intervention is being planned.

The remarks come just before South Korea launches a new 24-hour dollar-won trading system, which is expected to improve market efficiency and attract greater participation from global investors.

Why is South Korea working with Japan on forex issues?
South Korea is coordinating with Japan and other allies to monitor currency markets and maintain stability as the won remains under pressure.

Why is the South Korean won weakening?
Officials say the won is currently undervalued compared to economic fundamentals, while global market uncertainty and a strong US dollar continue to pressure the currency.

Won Remains Under Pressure

The South Korean won has fallen around 7.4% against the US dollar this year, reaching levels close to a 17-year low. Despite the weaker currency, the country's benchmark KOSPI stock index has recorded strong gains, creating a sharp contrast between equity and currency markets.

Deputy Finance Minister Moon Ji-sung also confirmed that Seoul continues to communicate with both Tokyo and Washington on foreign exchange matters. Officials expect extended trading hours to shift more offshore currency transactions into South Korea's domestic market.

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South Korea is increasing cooperation with Japan and other international partners to strengthen foreign exchange market stability. Finance officials say the won is currently undervalued relative to economic fundamentals and have pledged to intervene if market volatility becomes excessive. The announcement comes ahead of South Korea's transition to 24-hour dollar-won trading, a move expected to improve liquidity and attract more global participation.

Authorities Ready to Intervene

Officials stressed that the government has measures available to stabilise the currency market if sudden liquidity shortages or excessive price swings occur. The expansion of trading hours is also expected to improve transparency and strengthen the country's financial market infrastructure.

#Economy #South Korea #Finance #Currency #Markets