SEOUL, December 14 (AJP) -South Korea’s fiscal, monetary and financial authorities convened an emergency meeting on Sunday as the Korean won continued to weaken against major currencies, defying a broad retreat in the U.S. dollar.
The meeting was chaired by Deputy Prime Minister and Finance Minister Koo Yun-cheol and attended by Financial Services Commission Chairman Lee Eog-weon, Bank of Korea Governor Rhee Chang-yong, Financial Supervisory Service Governor Lee Chan-jin, and Presidential Chief Secretary for Economic Growth Ha Joon-kyung.
Reflecting heightened concern over foreign-exchange volatility, the meeting also included Lee Seu-ran, vice minister of the Ministry of Health and Welfare, which oversees the National Pension Service — a major player in FX market — as well as Park Dong-il, director general at the Ministry of Trade, Industry and Resources.
The emergency talks followed renewed weakness in the won after the U.S. Federal Reserve cut its benchmark interest rate by 25 basis points on Dec. 10 to a range of 3.50–3.75 percent, narrowing the interest-rate gap between South Korea and the United States from 1.50 percentage points to 1.25 percentage points.
Despite the rate cut — which typically supports the won by easing interest-rate differentials — the currency failed to hold gains. The won-dollar exchange rate briefly fell before rebounding toward the 1,470-won level.
The dollar closed at 1,473.7 won last Friday and touched 1,479.9 won in after-hours trading, its highest level since April’s presidential impeachment turmoil.
Data from the Bank of Korea’s Economic Statistics System show that the average exchange rate based on weekly closing prices reached 1,460.44 won last month, the highest monthly average since March 1998 during the Asian financial crisis, when it averaged 1,488.87 won.
So far this month, the two-week average has climbed further to 1,470.4 won. The exchange rate has not fallen below 1,450 won even intraday since Nov. 7, underscoring the won’s persistent weakness.
The won has been the sole underperformer among major currencies this month. While the Korean currency has fallen 0.69 percent against the dollar, other major currencies have strengthened, including the Australian dollar (+1.56%), Canadian dollar (+1.50%), euro (+1.20%), British pound (+0.94%), and Japanese yen (+0.17%).
The dollar index fell to 98.404 on Dec. 12 from 100.251 on Nov. 20, returning to mid-October levels, when the won was trading around 1,420 per dollar.
If current trends persist, South Korea’s annual average exchange rate is projected to reach a record high. The year-to-date average stands at 1,420.0 won, already exceeding the 1998 average of 1,394.97 won, marking the weakest annual level on record.
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