Societe Generale highlights that South Korean authorities have launched a multi-pronged FX stabilisation package to address short-term USD funding stress and speculative pressures on the Korean Won. Measures include a temporary FX stability levy exemption, enhanced interest on excess FX deposits, and tighter oversight of major FX banks. Officials are also urging exporters to accelerate FX conversion and repatriate offshore funds.
BoK and government intensify Won support
“The BoK rolled out multi-pronged FX stabilisation package after emergency meeting with the MoF and FSS, targeting short-term USD funding stress and speculative pressures.”
“Key measures include a 6-month exemption of the FX stability levy for banks and extension of interest payments on excess FX deposits (linked to the Fed rate) to boost USD liquidity.”
“Authorities also escalated oversight via joint inspections of major FX banks and tighter monitoring, signalling a shift from verbal warnings to active enforcement to curb destabilising trades and anchor KRW expectations.”
“South Korean Vice Finance Minister Huh Chang urged export firms incl Samsung Electronics and SK Hynix to support FX market stability by boosting FX supply via quicker conversion of export proceeds into KRW and repatriation of offshore funds.”
“BoK governor Shin Hyun-song said interest rate would be raised ‘on time’, leaving door open for rate hike ahead of next MPC meeting due 16th July.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
