Gov't issues warning over won's slide after Trump election victory

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Gov't issues warning over won's slide after Trump election victory

Published: 14 Nov. 2024, 10:16

PARK EUN-JEE
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Finance Minister Choi Sang-mok, left, who doubles as the deputy prime minister for economic affairs, speaks during a meeting with other economic policymakers in Seoul on Nov. 8, 2024. [YONHAP]

The Korean government issued a verbal intervention Thursday against excessive fluctuations in the local currency after the won sharply depreciated following the U.S. election.

Finance Minister Choi Sang-mok said that the government would take active measures, if necessary, to curb excessive volatility in the foreign exchange (FX) market.

The won is trading at 1,405.4, down 0.01 percent from the previous trading day, as of 10:03 a.m. Thursday.

Since Donald Trump's victory in the U.S. presidential election last week, the local currency has been trading around the psychologically significant level of 1,400 won against the U.S. dollar.

During a meeting with other economic policymakers in Seoul, Choi said that if excessive volatility emerges in the financial and FX markets, the government would promptly and effectively implement market stabilization measures. The minister delivered a similar message in mid-April when the exchange rate reached around 1,400 won per dollar due to escalating tensions in the Middle East.

Choi also highlighted the importance of maintaining strong coordination and an effective response system as part of the government's contingency plans.

Meeting participants shared a view that uncertainties related to policy shifts during the transition period before the new U.S. administration assumes office are contributing to market instability, the ministry said.

Attendees at the meeting expressed a shared view that uncertainties surrounding policy changes during the transition period before the new U.S. administration takes office are also contributing to market instability, the ministry said.

Trump has pledged to impose high tariffs on imported goods, adopt protectionist policies and introduce tax cuts, which experts believe could widen the U.S. budget deficit, intensify inflationary pressures and slow the Federal Reserve's rate-cutting measures.

BY PARK EUN-JEE, YONHAP [[email protected]]