SEOUL: Two top South Korean officials shrugged off the won’s fall to 13-year low in a subtle change of stance amid growing signs of benefits from a weaker won and easing global raw material prices.
At an usually low-key parliamentary session late on Tuesday, Prime Minister Han Duck-soo and Finance Minister Choo Kyung-ho both said the won was among many currencies which have weakened as the US dollar rose in value.
They dismissed proposals by some lawmakers that more aggressive measures were needed to support the won.
“The higher exchange rate was mainly due to the dollar’s strength that some describe as ‘King Dollar’,” said Han.
He said there was no urgent need to seek a revival of a currency swap with the US Federal Reserve to secure a stable source for dollars after a previous one expired last year.
The won has fallen 9.5% against the dollar this year to date after an 8.6% loss last year, making it Asia’s worst performer excluding Japan’s yen.
Choo said there would be negative effects if the authorities “pushed down the exchange rate artificially.” These remarks contrasted with a far more interventionist stance that South Korean authorities had shown earlier this year, accompanied by a series of dollar sales by the central bank.
Currency dealers and analysts said the remarks indicated that authorities were more confident that the worst may be over.
“They appear to think that it was fine for the won to stay weak for some time unless there’s a sense of crisis there,” said one currency dealer.
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