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Authorities intervene urgently as exchange rate approaches 1,400 won

Authorities intervene urgently as exchange rate approaches 1,400 won

Posted April. 17, 2024 07:25,   

Updated April. 17, 2024 07:25


Amid escalating tensions in the Middle East, U.S. economic indicators have surpassed market expectations, and the won-dollar exchange rate has reached the psychological threshold of 1,400 won. As the exchange rate continued to surge, foreign exchange authorities promptly intervened verbally to stabilize the market.

On Tuesday, the won-dollar exchange rate in the Seoul foreign exchange market closed at 1,394.5 won, marking a 10.5 won increase from the previous trading day. At one point during the day, it peaked at 1,400.0 won. This marks the first time since November 7, 2022 (1,414.5 won) that the exchange rate has reached the 1,400 won range intraday.

On the same day, foreign exchange authorities such as the Ministry of Strategy and Finance and the Bank of Korea issued an emergency notice, stating, “The foreign exchange authorities are closely monitoring exchange rate movements, foreign exchange supply and demand, etc., with vigilance,” and emphasized, “Excessive volatility in the foreign exchange market is not conducive to our economy.” This marks the first joint verbal intervention by the two organizations in 22 months.

In recent times, the phenomenon of a robust dollar has become increasingly evident, with the exchange rate hitting new highs daily. This trend is attributed to the strength of the dollar as a safe haven asset amidst looming uncertainties in the Middle East, coupled with delays in the U.S. Federal Reserve's (Fed) interest rate cuts.

이동훈 기자 dhlee@donga.com