Cynthia Kim and Yena Park
SEOUL (Reuters) – South Korea’s currency authorities view the 1,385 level as the boundary between the won and the dollar, two sources involved in policy discussions told Reuters on Tuesday, citing recent measures to stem currency weakness.
The Bank of Korea and the Ministry of Finance were preparing measures to intervene in the cash market if it breached the 1,385 level in overdue May, said the sources, who asked not to be identified because of the sensitivity of the matter.
“The authorities were waiting to see if the winnings weakened above the 1,385 level to decide when to introduce winning-supporting measures,” one of the sources said, referring to their talks with currency authorities.
The rapid weakening of the won is causing headaches for policymakers in Asia’s fourth-largest economy, as the currency has lost 6.5% against the dollar this year.
On Wednesday, the winnings were around 1,381.6 per dollar.
On May 31, the Finance Ministry said the Bank of Korea and the National Pension Fund were in talks to expand the $35 billion foreign exchange swap facility, a program that allows the fund to borrow the central bank’s foreign exchange reserves instead of buying dollars on the onshore foreign exchange market.
