Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Former vice finance minister criticizes Koreans for buying dollars
Hashed Open Research CEO Kim Yong-beom / Yonhap
By Anna J. Park
Won-dollar exchange rate ends at 1,421.5 in Tuesday's trade
By Anna J. Park
A former vice finance minister criticized Korean citizens and investors who hoard U.S. dollars as they speculatively bet on the U.S. currency.
“Who do you think are those who most aggressively buy U.S. dollars now? It's the Korean people. The Korean people, who tried to save the country by donating their gold during the Asian Financial Crisis in 1997, are now busy hoarding dollars at a more aggressive rate than foreign investors who leave the Korean stock market,” Hashed Open Research CEO Kim Yong-beom, who served as the country's first vice finance minister from 2019 to 2021, wrote on his Facebook page.
He went on to say that while investing in a foreign currency is not something that should be criticized, the government should regulate the local foreign exchange market to prevent unlimited speculative moves that exploit the weakness of the Korean won against the dollar.
“At this significant juncture where psychological sentiment is more important than ever, the government needs to give a second thought about the fact that local people have easy and unlimited access to bet on the Korean won's weakening,” he noted.
The won-dollar exchange rate ended at 1,421.5 on Tuesday, strengthening by 9.8 won from the previous trading session. The closing exchange rate on Monday, 1,431.3 won per dollar, was the all-time high seen in the last 13 and a half years (since March 2009).
The Korean won's depreciation against the dollar has accelerated lately, following a series of giant rate hike steps taken by the U.S. Federal Reserve where it raised the key interest rate by 75 basis points each time. The key interest rate of the U.S. is now greater than that of Korea as a result.
“Now is the time that the government is required to take every measure to minimize any leakage of foreign currency reserves, while closely monitoring supply and demand of foreign currencies,” Kim criticized the government's lax movement. “Local people would restrain hoarding dollars when they start to have faith in the financial authority's capability to defend the foreign exchange rate at a stable rate,” he added.