Korean Won Hits Weakest Level Since 2009 as Authorities Blame Speculation and Vow Intervention

Financial authorities on Monday vowed to take strict action against excessive volatility and one-sided movements in the foreign exchange market amid the weakening Korean won. "We assess that, in addition to supply and demand factors, certain speculative foreign exchange transactions, such as non-deliverable forwards (NDFs), have recently contributed to increased volatility in the foreign exchange market," a joint statement from the Ministry of Economy and Finance and the Bank of Korea said.

1 won from the previous session, after weakening to as low as 1,555 won against the greenback earlier in the day.

M. quotation, but remained above the 1,500-won level for the 15th consecutive session. , marking the weakest level for the won since March 9, 2009.

Chiefs of the finance ministry, the Bank of Korea, the Financial Services Commission held an emergency meeting on Sunday to review the foreign exchange market. They said the recent weakness in the local currency was not driven by economic growth concerns or simple supply-demand dynamics, citing the country's record current account surplus in the January-April period and strong exports.

Net selling by foreign investors in the stock market has accelerated downward pressure on the won.

Foreign investors have remained net sellers for 20 consecutive sessions since May 7 as part of portfolio rebalancing. U.S. Federal Reserve. Authorities will launch investigations into whether speculative activities are capitalizing on the weakening won or whether there have been attempts to disrupt the market, while also urging exporters to convert dollar holdings into won more quickly.