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South Korea Vows FX 'Decisive Action' as Won Rebounds and NPS Enters New Policy Front

Officials stopped short of concrete steps, reflecting U.S. scrutiny plus structural dollar demand.

Overview

  • Finance Minister Koo Yun-cheol said authorities will act decisively if volatility widens and flagged close monitoring of speculative, one-sided trading.
  • A new four-agency consultative body including the Finance Ministry, Bank of Korea, National Pension Service and Health Ministry held its first meeting to align FX stability with the NPS’s return mandate.
  • The won snapped a six-day slide on Tuesday to about 1,472 per dollar and strengthened further near 1,460 on Wednesday as stocks rallied, with the KOSPI up 2.67 percent.
  • Koo emphasized longer-term coordination rather than a one-off mobilization of the NPS, and he announced no immediate incentives for exporters or tax changes for stock investment.
  • Officials and data cite persistent dollar demand from the NPS’s expanding overseas portfolio, record outbound retail equity buying, foreign equity selling, and a BIS gauge showing the won’s real value near its weakest since 2009.