© Reuters. FILE PHOTO: A South Korea received be aware is seen on this illustration picture Might 31, 2017. REUTERS/Thomas White/Illustration/File Picture
By Choonsik Yoo
SEOUL (Reuters) -South Korea’s received fell greater than 1% on Thursday, ending under a key psychological stage for the primary time in 13-1/2 years, because the U.S. Federal Reserve continued to aggressively increase rates of interest, pressuring rising market currencies.
Defying official warnings from policymakers in Seoul towards sharp foreign money strikes, the received fell as a lot as 1.4% at one level.
It ended down 1.1% at 1,409.7 per greenback, marking the primary time it ended weaker than the 1,400-won stage since mid-March 2009. Each 100-won mark is taken into account psychologically necessary in South Korea.
Promoting intensified regardless of warnings of motion by each the finance ministry and the central financial institution towards extreme foreign money actions and media studies that the authorities have been looking for to introduce measures to ease greenback demand within the native market.
The received’s fall got here primarily because the U.S. greenback surged to a contemporary two-decade excessive in a single day after the U.S. Federal Reserve raised rates of interest by one other 75 foundation factors and signalled extra massive will increase to come back.
The South Korean foreign money has now misplaced greater than 15% of its worth towards the greenback thus far this yr primarily on dollar energy but in addition because of a deteriorating commerce stability, making it one of many worst performers amongst its friends.
The finance minister vowed at a gathering of officers early on Thursday to introduce measures to ease stress on the received, whereas native media reported the central financial institution and the nationwide pension fund may kind a foreign money swap.
He didn’t elaborate. Native media reported late on Wednesday that the central financial institution and nationwide pension fund have been contemplating forming a foreign money swap in order that the pension fund can meet a few of its greenback demand with out shopping for available in the market.
Each the Financial institution of Korea and the Nationwide Pension Service declined to touch upon the studies.
Later within the day, Yonhap information company quoted a senior presidential official as saying in New York that U.S. and South Korean leaders have agreed to look at cooperation for monetary stability in South Korea, together with a bilateral foreign money swap.