Central bank keeps eye on foreign exchange market

By Seo Jee-yeon
  • Published : May 16, 2014 - 21:11
  • Updated : May 16, 2014 - 21:11
South Korea’s top central banker said Friday that the Bank of Korea is closely watching the foreign exchange market amid growing currency volatility.

In a meeting with commercial bank heads, Gov. Lee Ju-yeol said the central bank was keeping tabs on the market for any herd behavior.

Lee’s remark is the latest in a series of comments by South Korean financial officials who voiced firm will to act against speculative forces and sharp volatility in the foreign exchange market.

Earlier this week, Vice Finance Minister Choo Kyung-ho told reporters that “foreign currency authorities remained worried about one-sided movement in the won-dollar exchange rates.”

The Korean won has strengthened more than 3 percent against the greenback since March.

The BOK chief, meanwhile, noted that the local economy is improving on solid exports but stressed the need to follow some key indicators as the sinking of passenger ferry Sewol has dampened domestic demand.

Speaking on the global economy, Lee said that advanced economies are shifting to a recovery track, recounting the discussions a Bank for International Settlements meeting held earlier this week. (Yonhap)

The BOK chief said that participants at the BIS meeting maintained their view on the economic recovery from a month earlier, citing positive indicators in countries such as China, Japan and the United States.

After attending a G20 meeting in April, Lee said that major economies are shifting their focus from dealing with a financial crisis to boosting economic growth.

The governor said that while the U.S. economy was weakened by severe weather conditions in the first quarter, the world’s largest economy is expected to enter a recovery phase in the second quarter.

He also took note that the Chinese economy nearly met its first-quarter growth target of 7.5 percent, while solid domestic demand propped up the Japanese economy despite lackluster exports. The central bank chief said the participants were attentive to the Chinese economy and lingering geopolitical risks in Eastern Europe. (Yonhap)