SEOUL: South Korea’s top economic policymaker said the government plans to take measures to stabilise the foreign exchange market, if needed, as the South Korean currency has fallen against the United States dollar at a fast pace, Yonhap reported.

       Finance Minister Hong Nam-ki made the verbal intervention as the Korean currency hit an over two-year low against the greenback Wednesday amid heightened external economic uncertainty.

       “The government is closely monitoring the foreign exchange market in a bid to curb the won’s excessive one-sided movements, and it plans to make efforts to stabilise the market, if needed,” he said.

       The local currency ended at 1,265.20 against the greenback, down 14.4 from Tuesday’s close. It marked the first time in more than two years that the won slid to the 1,260 level. The won further weakened against the dollar yesterday, but its pace markedly slowed after Hong made the remarks.The won’s weakness came as demand for the dollar was fuelled by expectations for the Federal Reserve’s (Fed) aggressive monetary tightening, the fallout of China’s Covid-19 lockdowns of its major cities and the Ukraine war.Fed chairman Jerome Powell signalled a 0.5 percentage-point rate hike in next week’s policy meeting as US inflation jumped to a 41-year high in March.

       Last month, the US central bank raised the policy rate by a quarter percentage point to 0.25%-0.5%, the first rate hike since 2018.

       The South Korean currency has fallen some 6% per the dollar so far this year. The won slid around 2% against the dollar in the latest three sessions alone.

       South Korea’s foreign exchange authorities unloaded a net US$6.89bil (RM30bil) in the fourth quarter of last year to ease volatility in the foreign exchange market.

       The Bank of Korea and the finance ministry have disclosed quarterly figures on net selling or buying of dollars in the foreign exchange market since the third quarter of 2019. — The Korea Herald/ANN