Written by Cynthia Kim and Wina Park
SEOUL (Reuters) – South Korea's foreign exchange authorities view the 1,385 level as a line in the sand for the won against the dollar, citing recent measures to stem the currency's weakness, two sources involved in the policy discussions told Reuters on Tuesday.
The Bank of Korea and the Ministry of Finance are preparing measures to intervene in the spot market if it exceeds the 1,385 level in late May, said the sources, who requested anonymity due to the sensitivity of the matter.
“The authorities were waiting to see whether the won would weaken beyond the 1,385 level to decide the timing of measures to support the won,” one of the sources said, referring to his talks with foreign exchange authorities.
The won's rapid weakness is causing a headache for policymakers in Asia's fourth-largest economy, where the currency has lost 6.5% against the dollar so far this year.
The won's price ranged around 1,381.6 to the dollar on Wednesday.
On May 31, the Ministry of Finance said the Bank of Korea and the National Retirement Fund were in talks to expand a $35 billion foreign exchange swap line, a program that allows the fund to borrow the central bank's foreign exchange reserves instead of buying dollars at home. Currency market.
