As of 10:50 a.m., the dollar rose 3.30 won to 1,484.10, even as the dollar index eased to 97.95 and the greenback softened against the Japanese yen — underscoring idiosyncratic weakness in the won rather than broad dollar strength.
The won’s slide through the psychologically critical 1,480 “defense line” came against the tide of foreign equity inflows, with overseas investors buying a net 276 billion won worth of KOSPI shares amid a global technology-stock shopping spree.
The breach has raised questions over the effectiveness and limits of authorities’ FX-defense capabilities, particularly as equity inflows failed to translate into currency support.
Ha Joon-kyung, senior presidential secretary for economic growth, became the latest official to join the chorus of intervention, warning in a local media interview on Monday that “one-sided market behavior has become pronounced since November,” and that speculative bets on further won weakness are intensifying.
“It would be a misjudgment to think the government will stand by in the face of excessive market concentration,” Ha said — a pointed signal that authorities are prepared to act.
Authorities have hinted all possible actions to defend the won, including dollar-selling and hedging operations by the National Pension Service, heightened real-time monitoring of FX flows, and repeated assurances that disorderly, speculative moves will not be tolerated.
The Bank of Korea has supplemented with liquidity incentives, including interest payments on banks’ FX reserve deposits and a temporary waiver of the FX stability levy, while signaling readiness for additional liquidity support and market-smoothing operations to counter disorderly won moves.
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