S. Korea ready to take action in case of increased currency volatility

SEOUL, Feb. 24 (Yonhap) -- South Korea will take "necessary measures" if there is increased volatility on the currency market caused by growing off-risk sentiment stemming from the new coronavirus outbreak, a ranking official said Monday.

"(We) plans to take necessary steps when the currency exchange rate moves too much in one direction due to increased speculation," said Vice Finance Minister Kim Yong-beom, adding the government was closely monitoring the market.

The vice minister noted the volatility in the financial market may continue to expand for some time due to the outbreak of COVID-19.

"The government will do its utmost to minimize the fallout on our economy and maintain the momentum for its recovery by preparing for the worst possible scenario," he said while speaking to reporters after a Seoul meeting with other economy related officials.

On Friday, the Korean won closed at 1,209.2 won against the U.S. dollar, plunging 10.5 won from the previous session's close. It was again sharply down Monday, trading at 1,215.65 won per dollar as of 9:40 a.m.

"We will need to see if it (the strengthening of the U.S. dollar) is the result of a special circumstance in South Korea alone, or if it is the outcome of a big trend in the global financial market," he added.

South Korea so far has reported a total of 602 virus cases and six deaths from the potentially fatal illness. Over the weekend, the number of confirmed cases tripled, stoking concerns that the novel coronavirus is fast spreading across the country.

On Sunday, the country raised its alert level to the highest of "red," in its latest enhanced step to fight the illness.

Of Monday's meeting, the vice finance minister said the government is reviewing all available steps to help minimize the fallout of the COVID-19 outbreak.

"The president has stressed the need for bold, extraordinary measures. The ministry will provide all available financial resources to enable all necessary quarantine measures," said Kim.

On Sunday, the ruling Democratic Party asked the government to draw up a supplementary budget for use in efforts to contain the novel coronavirus that has been gaining force in South Korea.
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