The Financial Services Commission announced that it held a meeting on the foreign exchange market on June 8 at the Government Seoul Building, chaired by Shin Jin-chang, the head of the commission's secretariat. Attendees included representatives from the Financial Services Commission, the Ministry of Economy and Finance, the Financial Supervisory Service, the Bank of Korea, as well as major banks such as KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup, State Street Bank, HSBC, and SC Bank.
This meeting followed an emergency market situation assessment meeting held the previous day, chaired by the Deputy Prime Minister for Economic Affairs.
Participants noted that recent fluctuations in the foreign exchange market are influenced by adjustments in foreign investor proportions in the domestic stock market and profit-taking, alongside global uncertainties such as rising tensions in the Middle East and expectations of U.S. interest rate hikes.
However, they assessed that the fundamentals of the South Korean economy remain strong, with continued upward revisions in profit forecasts for domestic companies, particularly in the semiconductor sector, and an expanding current account surplus due to robust exports. They agreed that excessive volatility and one-sided trends in the foreign exchange market are undesirable.
Additionally, authorities and related institutions will closely monitor derivative transactions in the offshore non-deliverable forward (NDF) market, which could impact the domestic foreign exchange market. They also plan to explore institutional improvements to absorb future offshore NDF transactions into the domestic market.
Furthermore, they will investigate any speculative trading or market disruption linked to the weakening won through the Bank of Korea and the Financial Supervisory Service, and will take strict action if any illegal activities are confirmed.
Shin Jin-chang stated, "We will maintain a 24-hour alert status, closely monitor market conditions, and respond promptly when necessary."
Major financial groups have also initiated emergency responses. KB Financial held an urgent executive meeting on the same day to review foreign exchange market trends and the group's overall response status. The meeting focused on assessing the response measures of its affiliates to address market, capital, and liquidity risks arising from the surge in exchange rates, and they agreed to continuously review their emergency response systems and management plans.
Hana Financial convened a crisis management council on June 4 to discuss the capital adequacy and liquidity status of the group and its affiliates, as well as future response strategies.
Shinhan Financial is also analyzing factors affecting foreign exchange market volatility and reviewing major currency hedging positions through its crisis management council. Woori Financial is activating its emergency response system, focusing on assessing the impacts on liquidity and capital adequacy.
* This article has been translated by AI.
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