A trader gestures in front of screens showing the Korea Composite Stock Price Index (KOSPI), left, and the exchange rate of the South Korean won against the US dollar at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea on Friday, Sep 30, 2022. (Photo: AP/Ahn Young-joon)
SEOUL: South Korean President Yoon Suk-yeol called on Friday (Sep 30) for more urgency in dealing with turbulent markets as the won currency’s fall to a 13-and-a-half year low heightened fears of capital flight.
He made the remarks at a meeting of economic officials as a weekly opinion poll found his approval rate had fallen to 24 per cent, the joint-lowest level since he took office six months ago.
“We have built a stronger breakwater than in the past in terms of external soundness and already implemented market stabilising measures, but it is time to deal with the situation with a sense of more urgency,” Yoon said at the beginning of the meeting.
It appeared to be indicating imminent intervention in markets and dealers suspected the authorities of “carrying out smoothing operation” of modest intervention, but there was no talk of massive intervention on Friday.
The won managed to end the day’s onshore trading 0.6 per cent higher versus the dollar but suffered a 6.47 per cent loss for the month of September, marking the worst month since September 2011, as a souring in risk appetite hit South Korean assets.
The Bank of Korea, the central bank, also said after markets closed that it sold a net US$15.41 billion for intervention in the foreign exchange market during the second quarter in addition to a net US$8.31 billion it sold in the first quarter.
A statement released by the presidential office after the meeting provided no further comment by Yoon, while Finance Minister Choo Kyung-ho was cited as asking companies to cooperate in keeping stability on the foreign exchange market.
It was the third such meeting to review economic and financial conditions since Yoon took office in early May, and was also attended by a central bank official and executives from several top companies, according to the presidential office.
The won has lost 17 per cent of its value against the US dollar this year while the benchmark KOSPI share index has slumped 28 per cent in the same period, with foreigners selling a net 12 trillion won (US$8.38 billion) in shares on the main board.
There has been a growing demand for government intervention in the markets, analysts have said. But authorities have said the volatility is mostly related to outside factors and in line with a global pattern.
Gallup Korea said on Friday the approval rate on President Yoon fell to 24 per cent in the latest weekly survey from 28 per cent in the previous week, compared to as high as 53 per cent in early June.