Bank Forward Exchange Position Limit Raised by 25%... Government Enters Emergency Mode

President Moon "All Industrial Sectors Are in Crisis"
Emergency Economic Meeting Led by President
Crisis Management Meeting Revived After 7 Years

[Image source=Yonhap News]

[Sejong=Asia Economy Reporters Kim Hyunjung and Son Seonhee] The government has decided to expand the forward foreign exchange position limit for banks by 25% to prevent difficulties in foreign currency procurement for companies and financial institutions. President Moon Jae-in will preside over weekly meetings that include government ministries, private sectors, and academia to directly assess the current status of the novel coronavirus infection (COVID-19) and devise countermeasures. The economic team will also reactivate the crisis management meeting for the first time in seven years. In effect, the government has entered an unprecedented emergency system to respond to recent market conditions.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated at the crisis management meeting held at the Government Complex Seoul on the 18th, "We plan to raise the forward foreign exchange position regulation limit for banks by 25%," adding, "This measure is expected to contribute to stabilizing the foreign exchange swap market by inducing an increase in foreign currency inflows." The government’s adjustment of the forward foreign exchange position limit is the first in three years and eight months since July 2016.

To facilitate the early resolution of the financial and real economy complex crisis brought about by COVID-19, the Blue House and the government have entered an emergency system. At 10:30 a.m. on the same day, President Moon held a roundtable meeting at the Blue House with key economic stakeholders. At the meeting, President Moon said, "It is not just some sectors but all industries that are in crisis," and appealed, "The government's power alone is insufficient. I earnestly ask you to become the main actors in overcoming the economic crisis through the power of solidarity and cooperation." He continued, "We must accelerate the stabilization of the livelihood economy, including wage subsidies for large and small-medium enterprises and support for employment retention for low-income groups," emphasizing, "We will strive to ensure that necessary support reaches those who need it in a timely manner."

Starting on the 19th, President Moon will preside over a weekly 'Emergency Economic Meeting.' This meeting will include Deputy Prime Minister Hong, relevant ministers, and Blue House aides, but depending on necessity, economic organizations, labor representatives, and private experts will also attend. It is a meeting body that consolidates nationwide capabilities from the government, private sector, and academia.

The existing Economic Ministers’ Meeting and Economic Vitality Measures Meeting, which Deputy Prime Minister Hong presided over, have been converted into the Crisis Management Meeting starting from this day. The Crisis Management Meeting, which was first activated during the financial crisis in July 2008 when the existing Economic Ministers’ Meeting was converted, has been revived for the first time in over seven years since February 2013.

This content was produced with the assistance of AI translation services.