SEJONG, Sept. 29 (Korea Bizwire) – South Korea will take market stabilizing measures if the country’s foreign exchange becomes more exposed to volatility due to an external shock, a senior finance ministry official said Thursday.
“Foreign exchange rates will be decided autonomously by the market,” Deputy Finance Minister Hwang Kun-il said at a symposium in Seoul. “But the government will take action if the rates experience a wide fluctuation in line with standing procedures.”
He said the government will be flexible in managing the country’s foreign exchange policies to help the market become more resistant to unexpected external shocks.
The official also noted that South Korea is strong enough to deal with the possible financial risks stemming from North Korean provocations and U.S. monetary tightening, citing that the country posted a current account surplus for 65 straight months and held a record US$384.8 billion in foreign reserves as of the end of August.
At the same time, Asia’s fourth-largest economy received a record high sovereign rating by global credit appraisers like Standard & Poor’s and Moody’s, he added.
“South Korea’s external financial soundness has improved to a large extent after overcoming the previous crises in 1997 and 2008,” said Hwang. “The government will make constant efforts to maintain this soundness going forward.”