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(Sejong=Yonhap Infomax) Wook Choi – Deputy Prime Minister and Minister of Economy and Finance Gu Yoon-chul will hold an emergency press briefing on November 26 to address recent developments in the foreign exchange market and deliver a message regarding exchange rate stability.
According to the Ministry of Economy and Finance on November 25, Deputy Prime Minister Gu will convene a press conference at 10:00 AM KST on November 26 at the Government Complex Sejong, focusing on the current economic situation, including the FX market.
Gu is expected to explain key issues affecting the foreign exchange market and emphasize the government's commitment to stabilizing the won-dollar exchange rate.
Typically, press briefings at the deputy prime minister level are announced several days in advance. However, this session was scheduled on short notice, just one day prior, reflecting the urgency of the situation.
The move comes as the dollar-won exchange rate has recently surged above the 1,470 won level, prompting direct intervention by the head of the foreign exchange authorities.
There has also been public scrutiny over the recent activation of a four-party consultative body involving the National Pension Service (NPS), with some critics arguing that the NPS is being mobilized to stabilize the FX market.
The Ministry of Economy and Finance announced the previous day that it had formed a four-party consultative group with the Ministry of Health and Welfare, the Bank of Korea, and the National Pension Service to assess the impact of expanding overseas investments on the FX market, and that the first meeting had taken place.
This follow-up measure comes just ten days after Deputy Prime Minister Gu, during a market monitoring meeting with Bank of Korea Governor Rhee Chang-yong on November 14, stated, "We will engage in close discussions with major supply and demand entities such as the National Pension Service."
Market participants expect the consultative body to discuss extending the currency swap agreement between the Bank of Korea and the NPS, as well as strategic FX hedging by the NPS.
Last year, when the dollar-won rate spiked amid a state of emergency, the NPS contributed to stabilizing the exchange rate through currency swaps and FX hedging in cooperation with the authorities.
Currently, the foreign exchange authorities and the NPS have a $65 billion currency swap agreement in place, valid through the end of this year. The market is watching closely to see whether the agreement will be extended or its ceiling increased.
Another key focus is whether the NPS will implement strategic FX hedging. Such hedging is permitted for up to 10% of overseas assets and can be triggered if the exchange rate exceeds its long-term average for a certain period.
wchoi@yna.co.kr
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