Cynthia Kim and Yena Park
SEOUL (Reuters) – South Korea’s currency authorities view the 1385 level as a line in the sand for the won against the dollar, two sources involved in policy discussions told Reuters on Tuesday, citing recent measures to curb currency weakness.
The Bank of Korea and the Finance Ministry were preparing measures to intervene in the spot market if it broke above the 1,385 level in late May, said the sources, who spoke on condition of anonymity due to the sensitivity of the matter.
“Authorities were waiting to see if the won would fall beyond the 1,385 level to determine the timing of measures to support the won,” one of the sources said, citing conversations with currency authorities.
The won’s rapid weakening has caused headaches for policymakers in Asia’s fourth-largest economy as the currency has lost 6.5% against the dollar this year.
On Wednesday, the won fluctuated at 1,381.6 per dollar.
On May 31, the Treasury Department said the Bank of Korea and the National Pension Fund are in talks to expand their $35 billion currency swap line, a program that allows the fund to borrow the central bank’s foreign exchange reserves instead of buying dollars in the domestic market. currency market.