© Reuters. FILE PHOTO: South Korea Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho attends the G20 Finance Ministers Meeting in Nusa Dua, on Indonesia resort island of Bali, on July 15, 2022. Sonny Tumbelaka/Pool via REUTERS
SEOUL (Reuters) – South Korea’s finance minister said the government would prepare more measures to stabilise the foreign exchange market, while downplaying the need for a currency swap arrangement with the United States.
The measures include utilising the government’s foreign exchange equalisation fund to meet shipbuilding companies’ FX hedging demands, thereby increasing dollar supply in the local market, minister Choo Kyung-ho said during a televised interview on Sunday.
It is part of FX authorities’ efforts to ease volatility in the FX market, Choo said, in addition to a currency swap arrangement between the country’s central bank and a pension fund announced on Friday, as they are seeing the South Korean won recently weakening at a faster pace than most peers.
On a question about the possibility of a currency swap deal between the Bank of Korea and the U.S. Federal Reserve, Choo said it would definitely be helpful for the local market, but is not necessary yet in the current market situation.