Han Dong-hoon, former leader of the People Power Party, criticized the foreign exchange authorities' intensive verbal intervention on Sunday as a "stopgap measure," saying "what needs attention now is prices over stock prices, exchange rates over approval ratings."
"The real reason behind the won's depreciation is that markets predict manufacturing competitiveness is declining and will continue to decline," Han said on Facebook.
"The market knows why the won is losing value," he said. "The trade negotiations with the U.S. resulted in an agreement that will drain $20 billion annually from our foreign exchange reserves. This means we have no ammunition to defend the currency even if exchange rates become unstable."
Han argued that "if there were expectations that Korea would export well in the future, the won could not have fallen this much," adding that "the Lee Jae-myung government and the ruling party have eroded manufacturing export competitiveness through policies that burden manufacturers, such as passing the Yellow Envelope Act and pushing for renewable energy expansion."
"I want to believe the government will do well and things will improve, but my concerns grow when I see a government blaming the National Pension Service and retail investors trading U.S. stocks for the rising exchange rate," he said.
"Rather than stopgap measures like yesterday's response, the government must confront and address the real issue of weakening manufacturing competitiveness," Han added. "What President Lee Jae-myung needs to focus on now is prices over stock prices, exchange rates over approval ratings."
