South Korea on Thursday said it will disclose details of actions taken by currency authorities on a regular basis starting in the second half of this year, a move likely to ease concerns about the country being labelled a currency manipulator by the United States.
The country's FX authorities will disclose the net amount used on buying and selling of US dollars to prevent sharp swings in the South Korean won, the finance ministry and the Bank of Korea said in a joint statement.
Market intervention details for July-December period of 2018 will be disclosed in March 2019 on the BOK website. From the second half of 2019, the details will be disclosed on a quarterly basis.
The move would help improve the transparency of South Korea's currency market, as the government and the Bank of Korea have not been sharing details of its "smoothing operations" until now. The decision will "remove unnecessary misunderstandings about our currency market operations and help build trust about our policies", the statement said.
Jung Sung-yoon, a currency analyst at Hyundai Futures says the change doesn't mean any reduced power at the BOK in intervening in the foreign exchange market.
"In theory, disclosing of intervention details is something the authorities would be uncomfortable with, but it doesn't mean they will sit still when markets are volatile," Jung said.
"FX authorities know they can and will conduct smoothing operations when necessary." The won showed muted reaction after the announcement, down 0.04 percent at 1,078.0 per dollar.
"In cases of excessive swings, we will take appropriate action," Kim Yoon-kyung, head of the finance ministry's international finance bureau told reporters in a press conference. In March, South Korean officials said plans to disclose details of currency market interventions were under review, as was long suggested by the International Monetary Fund. South Korea, along with China, avoided the label of currency-manipulator in the US Treasury Department's twice-yearly report in April, but was kept on a currency "monitoring list".
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