The South Korean currency briefly surged above 1,000 won against the U.S. dollar Wednesday as the financial authorities intensified their market intervention.
The won jumped to 998.9 won against the greenback at around 1 p.m. after an unspecified amount of dollars apparently sold by the government flowed into the currency market. The local currency closed at 1,004.9 won, up 27.8 won from the previous day.
This marks the first time that the won-dollar exchange rate has fallen below 1,000 won in 47 trading sessions.
The authorities' intervention in the currency market was the second of its kind after the Finance Ministry and the Bank of Korea issued a joint statement Monday, pledging to work together to stem the won's excessive decline.
South Korea has $258 billion worth of foreign currency reserves to support the won.
The South Korean government has taken various measures to block the won's further decline after it retracted its earlier export-focused "weak won policy" amid skyrocketing oil prices and their upward pressure on inflation.
A weaker won helps boost exports by making products cheaper overseas but fuels inflationary pressure by raising import prices. South Korea's consumer prices jumped 5.5 percent in June from a year earlier, the steepest gain in almost a decade.
On Monday, the government intervened in the currency market by selling an estimated $2 billion, helping the won advance nearly 1 percent.