South Korean Won: Authorities step up FX defence – BNY
BNY’s Bob Savage highlights that South Korean policymakers held an emergency meeting and vowed stern action against speculative FX activity as USD/KRW trades at its weakest since 2009. The National Pension Service has resumed forward FX selling under a higher hedge ratio framework. Despite KRW support, KOSPI has dropped sharply, underscoring broader risk-off pressure on Korean assets.
Policy support as won tests lows
"The FX markets saw KRW gain 1% after government plans to support the currency even as its KOSPI stock index fell 8%."
"South Korean top economic and financial policymakers held an emergency meeting, and vowed stern action against speculative and market-disruptive foreign exchange activities as the won weakens."
"Officials said they will monitor the FX market around the clock and act swiftly if volatility worsens."
"South Korea’s National Pension Service has resumed selling forward FX contracts after pausing earlier this year, signaling active hedging as the won weakens and the market tests higher USD/KRW levels."
"According to foreign exchange authorities, the pension fund has again been offering forward sales in the Seoul FX market, and such activity is expected to continue for the time being."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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