South Korean Won: Authorities step up FX stabilisation push – Societe Generale
Societe Generale highlights that South Korean authorities have launched a multi-pronged FX stabilisation package to address short-term USD funding stress and speculative pressures on the Korean Won. Measures include a temporary FX stability levy exemption, enhanced interest on excess FX deposits, and tighter oversight of major FX banks. Officials are also urging exporters to accelerate FX conversion and repatriate offshore funds.
BoK and government intensify Won support
"The BoK rolled out multi-pronged FX stabilisation package after emergency meeting with the MoF and FSS, targeting short-term USD funding stress and speculative pressures."
"Key measures include a 6-month exemption of the FX stability levy for banks and extension of interest payments on excess FX deposits (linked to the Fed rate) to boost USD liquidity."
"Authorities also escalated oversight via joint inspections of major FX banks and tighter monitoring, signalling a shift from verbal warnings to active enforcement to curb destabilising trades and anchor KRW expectations."
"South Korean Vice Finance Minister Huh Chang urged export firms incl Samsung Electronics and SK Hynix to support FX market stability by boosting FX supply via quicker conversion of export proceeds into KRW and repatriation of offshore funds."
"BoK governor Shin Hyun-song said interest rate would be raised ‘on time’, leaving door open for rate hike ahead of next MPC meeting due 16th July."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Federal Reserve meeting minutes: All 19 policymakers support a rate hike in September, but reasons vary; most expect further hikes this year, suggesting no urgency in October.
Most officials view a September interest rate hike as an "insurance" measure against stubborn inflation; a minority see it as a necessary step to curb inflation. Overall, there is no indication of a desire to push for consecutive rate hikes. The "New Fed News Agency" emphasized the minutes: "Most participants believe that it may be appropriate to raise interest rates again before the end of the year." Nearly all officials believe inflation remains elevated and the labor market is close to full employment. Many noted that, despite the rise in long-term U.S. Treasury yields, financial conditions are still conducive to economic growth. Some officials believe that AI will boost investment and productivity, but may also contribute to inflation. The minutes revealed that the U.S.-Japan joint intervention in July to support the yen was a U.S. Treasury action, with no Federal Reserve funds used.
Solana Consolidates After Sharp Expansion
FLOKI Recovery Tests Key Resistance
100 Million Barrels Shrinkage? Reports Say EU Believes Oil Reserve Release Plan Mainly Fulfills Previous Commitments, Not New Quotas
Last Friday, G7 member countries agreed to release up to 100 million barrels of crude oil and diesel reserves. The IEA had announced a plan to release 400 million barrels in March, and as of last Friday, about 75 million barrels had yet to be released. Most EU member states believe that this action is simply fulfilling previous commitments rather than adding new releases. Regarding the earlier-than-scheduled release of diesel stocks emphasized in last week's G7 agreement, EU member states consider it feasible, but on a limited scale.
Crypto prices
More
