South Korea holds emergency meeting on startling currency drop

The won lost as much as 0.9%, weakening to 1.161.4 per dollar, making it the worst performer in the region on the day.

SEOUL: South Korean authorities will hold a meeting to discuss what it terms distortions in the currency market, taking its firmest step yet to address the won’s decline this month.

The currency has dropped too rapidly in a short period of time, and its weakness is excessive compared to fundamentals, said a Bank of Korea official, who asked not to be identified citing the central bank’s disclosure rules. A finance ministry official said authorities will meet soon to discuss the distortion.

The won has dropped around 2.3% this month toward 1,200 per the dollar amid an escalation of U.S.-China trade tension. Asia’s worst-performing currency this year has been buffeted by a sharp slowdown in chip exports, while the trade war has hurt Korea’s economic outlook.

The Ministry of Finance and the Bank of Korea have jawboned the market on at least eight occasions this month before Wednesday, with the tone getting sharper in recent days. Bloomberg