Bank of Korea: Will deploy measures to stabilize FX market as needed, USD/KRW defends 1,400

Bank of Korea (BoK), the South Korean central bank, said on Wednesday that it will “deploy various measures to stabilize the FX market as needed.

Additional takeaways

Will increase short-term liquidity measures starting Wednesday.

Will loosen collateral policies in repo operation to ease any bond market jitters.

Make any special loans available to inject funds into market if needed.

The central bank stands ready to intervene in the forex market after the South Korean Won (USD/KRW) witnessed intense volatility on Tuesday when President Yoon Suk Yeol declared “emergency martial law”, accusing the opposition Democratic Party of sympathising with communist North Korea.

USD/KRW jumped to its highest level since October 2022 at 1,444.05 in reaction to the political jitters before stabilizing to nea 1,415 early Wednesday. The KRW markets breathed a sigh of relief after the parliament voted to reject his martial law declaration, and President Yoon Suk Yeol said that he would soon lift the military rule he had imposed overnight.

According to the latest update, South Korea’s opposition party said it would initiate impeachment proceedings against President Yoon Suk Yeol unless he immediately resigned.