The dollar fell 22.8 won to 1,459.2 won as of 10 a.m., outperforming the dollar index’s 0.34 percent decline to 97.61.
In a joint message issued before the market opened, senior officials at the Ministry of Economy and Finance and the Bank of Korea warned of their "strong will and policy capacity" to curb what they described as "undesirable" and excessive weakness in the local currency.
The warning came after the dollar briefly tested the 1,480-won level earlier this month, nearing its annual trough in April amid renewed market volatility triggered by Washington's tariff-related measures.
A foreign-exchange trader, speaking on condition of anonymity, said a large volume of forward dollar selling and currency-hedging transactions appeared to enter the market in tandem with the authorities' verbal intervention.
Earlier this month, the National Pension Service extended a US$65 billion foreign-exchange swap agreement, giving the fund greater flexibility to conduct strategic hedging when the exchange rate reaches certain thresholds.
The suspected hedging activity has reinforced market expectations that authorities are effectively defending the 1,480-won level as a key psychological and policy line.
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