The Korean won opened at its weakest level against the U.S. dollar since the global financial crisis, briefly touching 1,530 won early Tuesday before paring losses after the government issued a verbal intervention.
The won-dollar exchange rate opened at 1,530.0 won in the Seoul foreign exchange market on the 4th, up 14.4 won from the previous trading day. The move reflected the previous session's close of around 1,533 won for the one-month contract in the New York non-deliverable forward (NDF) market.
The rate held at the 1,530-won level immediately after the open, marking the highest level in roughly 17 years since March 2009. The move was attributed to dollar strength on the back of solid U.S. employment data and heightened geopolitical tensions in the Middle East, along with continued net selling of Korean stocks by foreign investors.
The won later trimmed its losses as the government signaled its commitment to market stability. Earlier in the morning, Deputy Prime Minister and Finance Minister Koo Yun-cheol convened a joint market situation review meeting at the Government Complex in Seoul with Bank of Korea Governor Hyun Song Shin, Financial Services Commission Chairman Lee Eok-won, and Financial Supervisory Service Governor Lee Chan-jin to assess recent financial and foreign exchange market developments.
After the meeting, Koo said, "We are closely monitoring the situation with a high level of vigilance to prevent the spread of anxiety amid heightened external uncertainty." He added, "We will immediately take necessary measures against excessive herd behavior."
Once the authorities' vigilance was confirmed, the rate fell to 1,520.0 won around 9:14 a.m., down about 10 won from the opening price. As of 9:24 a.m., the won was trading in the 1,523-1,525-won range, slipping below the 1,530-won mark.
