Foreign Exchange Authorities Intervened with Net Purchases of 11.54 Billion USD in Q4 Last Year Amid Sharp Exchange Rate Drop

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Eunbyeol Kim] The foreign exchange authorities purchased a net total of $11.543 billion in the foreign exchange market in the fourth quarter of last year to stabilize the market, the Bank of Korea announced on the 31st. It is interpreted that market stabilization measures were taken because the decline in the won-dollar exchange rate was steeper than that of other major currencies.

The won-dollar exchange rate (based on closing price) fell from 1,169.5 won on September 29 last year to 1,086.3 won on December 30.

A Bank of Korea official explained, "In the fourth quarter of last year, Korea's economic indicators were relatively favorable, so the won-dollar exchange rate declined," adding, "Considering the strong fundamentals, we also took into account that the won appreciated faster compared to other major currencies."

The Bank of Korea and the Ministry of Economy and Finance have been disclosing the net difference between total dollar purchases and total sales by the foreign exchange authorities since March 2019. Since the third quarter of that year, the net difference has been disclosed quarterly. The figures for the first quarter of this year will be released at the end of June.

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