South Korea’s currency authorities view the 1,385 level as a line in the sand for the won against the dollar, two sources involved in the political discussions told Reuters on Tuesday, citing recent measures to curb the currency’s weakness. .
The Bank of Korea and the Ministry of Finance were preparing measures to intervene in the USD/KRW spot market if it had surpassed the 1.385 level by the end of May, said the sources, who requested anonymity due to the sensitivity of the matter.
“The authorities were waiting to see if the won weakened beyond the 1.385 level to decide the timing of support measures for the won,” one of the sources said, referring to their talks with currency authorities.
The rapid weakening of the won has been causing headaches for policymakers in Asia’s fourth-largest economy, as the currency has lost 6.5% against the dollar so far this year.
The won was around 1,381.6 per dollar on Wednesday.
On May 31, the Finance Ministry said the Bank of Korea and the National Pension Fund are in talks to expand its $35 billion currency swap line, a program that allows the fund to borrow foreign reserves. from the central bank instead of buying dollars in the onshore currency market.
