Financial authorities say Korean won's sharp weakness eased, yet volatility remains

The KOSPI and the won-dollar exchange rate are displayed on monitors in the dealing room of Hana Bank in Seoul, Thursday. Yonhap

Top financial authorities said Thursday excessive depreciation of the Korean won has eased somewhat since the end of last year, but the country's foreign exchange market continues to show high volatility.

In a meeting on the financial market, Finance Minister Koo Yun-cheol said authorities would continue to implement follow-up stabilization measures on the foreign exchange market promptly, following a series of actions taken in late December.

The meeting was also attended by Bank of Korea Gov. Rhee Chang-yong, Financial Supervisory Service Gov. Lee Chan-jin and Financial Services Commission vice chief Kwon Dae-young, according to the finance ministry.

In late December, foreign exchange authorities warned against the won's recent excessive weakness and pledged strong policy execution to stabilize the foreign exchange market.

"Participants agreed that, given the current exchange rate is disconnected from fundamentals, it is important for authorities to maintain firm and consistent policy efforts," the ministry said in a press release.

On Dec. 24, foreign exchange authorities said an excessively weak won is undesirable, adding that the market will soon witness their strong commitment and capacity for comprehensive policy measures to stabilize the local currency.

The so-called verbal intervention came as the won neared its weakest level in 16 years against the U.S. dollar in recent weeks, despite a series of stabilization measures by the authorities.

Since then, the local currency has strengthened to its highest level in nearly two months against the dollar.

On Thursday, the won was trading at 1,449.10 won against the dollar at 9:15 a.m., down 3.3 won from the previous session.