South Korea's top currency diplomat warned on Friday that the current dollar-won exchange rate is still misaligned with the economy's fundamentals, and that his team has ample room to stabilise the market if needed.
Deputy Finance Minister Moon Ji-sung said the supply-demand dynamics of the local currency market are expected to shift in the second half of 2026, anticipating that dollar holdings from exporters will generate inflows via FX forwards.
"The current exchange rate remains misaligned with economic fundamentals," Moon told Reuters over the phone, adding that the country's robust export engine and corporate dollar reserves do not justify the current currency discount.
The won gained 0.35 percent to 1,504.2 per dollar as of 0219 GMT after Moon's comments were published, changing course after weakening earlier in the day.
The South Korean currency recently hit its weakest level since March 2009, driven in large part by massive foreign equity selloffs and a structurally strong greenback.
Moon's remarks come after South Korea officially launched landmark 24-hour onshore trading for the dollar-won spot market from Monday this week.
Reuters
