South Korean's financial authorities agreed to investigate and take stern action against speculative trading that has fueled sharp swings in the won against the US dollar, the ministry said in a statement.
During an emergency meeting chaired by finance minister Koo Yun-cheol, authorities also agreed to probe any illegal trades by importers and exporters, marking their strongest warnings yet as they scramble to curb the won's sharp decline.
The Korean won breached the key psychological level of 1,550 per dollar late on Friday night, hitting its weakest since 2009, due to rising interest rates and the Iran war.
The government pledged to enhance the transparency of the Non-Deliverable Forward (NDF) dollar-won market to combat excessive volatility in the won.
Foreign investors rely on the NDF derivatives market to trade the won and manage their exposure to the currency offshore, and it has often been a market for speculative bets against the won.
"The participants agreed that excessive exchange rate volatility is undesirable for the Korean economy, and that they would not tolerate excessive volatility or one-sided market movements," the finance ministry said in a statement.
The won's plunge coincides with a critical structural transition as the government prepares to launch 24-hour trading of the dollar-won spot market from early July.
Reuters
