'Exchange Rate Volatility' Amplifies: FSC Holds Financial Situation Review Meeting... Urges "Support for Export Companies"

Senior Deputy Director-led Inspection Meeting... "Possibility of Market Instability Due to Exchange Rate Increase"
Supervision to Ensure Various Measures, Including Rationalization of Bank Sector Risk Weights, Are Appropriately Utilized

As political instability intensifies and the won-dollar exchange rate surpasses 1,470 won, the highest level since the financial crisis, the Financial Supervisory Service (FSS) has decided to actively support the implementation of bank sector support measures for export companies, such as extending the maturity of foreign currency loans and import letters of credit.

Financial Supervisory Service, Yeouido, Seoul. Photo by Younghan Heo younghan@

On the 27th, the FSS held a financial situation review meeting chaired by Senior Deputy Governor Lee Se-hoon to discuss countermeasures, including the recent sharp rise in exchange rates and year-end capital market trends.

At the meeting, the FSS assessed that despite increased volatility in the foreign exchange market and timely corrective actions taken against some savings banks, the overall financial sector and corporate funding conditions remain stable. However, considering the potential market instability due to the recent exchange rate increase, the FSS decided to communicate with financial institutions and companies to identify difficulties and provide active support.

In particular, the FSS will support the proper implementation of bank sector support measures for export companies, such as extending the maturity of foreign currency loans and import letters of credit, and preferential fees for trade bills. Senior Deputy Governor Lee urged, "Please actively support the government's foreign exchange supply improvement measures, such as raising the forward foreign exchange position limits for financial companies and easing restrictions on the use of foreign currency loans, ensuring they are implemented without disruption. Also, continue to identify improvements in foreign exchange supervision in the financial sector to alleviate the burden on export companies."

The FSS will also supervise to ensure that measures to enhance financial stability and real economy capacity?such as rationalizing risk weights in the banking sector, deferring stress buffer capital, and transitional measures for new soundness regulations in the insurance sector?are utilized in line with the purpose of supporting the real economy. Furthermore, the FSS will promptly support necessary measures to ensure that tailored debt adjustments for small business owners, support for business closures, and win-win finance are smoothly implemented on the ground.

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