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S. Korean gov't makes efforts to stabilize FX market: vice finance minister

All News 15:41 September 01, 2016

SEJONG, Sept. 1 (Yonhap) -- The South Korean government is doing its best to stabilize the volatile foreign exchange market that has been stirred up by rising overseas financial uncertainties like a possible U.S. rate hike, a vice finance minister said Thursday.

"Volatility of the foreign exchange market at home and abroad has expanded due to an imminent rate increase by the U.S. Fed and the British vote to exit the European Union," Vice Finance Minister Choi Sang-mok said in a meeting with local and foreign bank officials that deal with foreign exchange dealings at the headquarters of KEB Hana Bank in Seoul.

"The government will make all-out efforts to stabilize the market and attain its further development."

As part of the efforts, the Seoul government increased the exchange equalization fund and agreed with Japan to start talks to resume the won-yen currency swap deal that expired last year in order to build up its overseas financial safety net, Choi said.

He also said that South Korea was the world's seventh-largest holder of foreign exchange reserves as of end-June, which will give another big buffer against a potential financial crisis.

The won-dollar rate has experienced a roller coaster ride for a few weeks. On Aug. 16, the won soared 1 percent to reach 1,092.2 won against the U.S. dollar, but it plunged 1.5 percent to 1,108.3 won the next day.

He said the foreign currency rate will fluctuate further as escalating uncertainties will keep weighing heavily on the market.

"South Korea has good financial strength, given that global rating agencies upgraded our sovereign grade," the vice minister said. "The government will not let its guard down."

Standard & Poor's raised the rating of Asia's fourth-largest economy to "AA" last month, the third-highest level on the company's table, citing steady economic growth and a sound fiscal balance.


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