South Korea Mulls Plans to Disclose Forex Interventions

The South Korean central bank is considering publishing the amount of ‎foreign currency purchases it carries out for the finance ministry, as the U.S. ‎continues to closely monitor the country’s economic trends and foreign ‎exchange policies.‎

The finance ministry and the Bank of Korea announced they are mulling plans to ‎advance the FX market as the International Monetary Fund continues to urge major ‎economies to increase transparency in its foreign-exchange ‎interventions and reserve holdings. The central bank plans to disclose its ‎interventions data with a time lag, yet no decision has been made on details ‎of such plans.‎

In its latest twice-yearly foreign currency report, the U.S. Treasury voiced ‎concern over economic policies of its major trading partners, including ‎Korea, and put them on a new monitoring list, mostly due to their large ‎‎surpluses

However, South Korea’s regulators had denied they are intervening in the currency ‎market. The central bank repeatedly said that it had ceased its interventions, and ‎that the Won was near its equilibrium level, even though it engages in “smoothing ‎operations against extreme one-sided movements.”‎

The United States has for years called for countries with current account ‎surpluses to establish effective communication channels and respond to its concerns over the exchange rates.

South Korea was found to have both a material current account surplus and ‎have made persistent net foreign currency purchases, prompting ‎the United States to call on it to limit FX interventions to ‎exceptional circumstances and increase transparency.‎

Trump’s administration also criticized China and Germany for running “an extremely large and ‎persistent bilateral trade surplus” with the United States, by far the largest ‎among any of the major U.S. trading partners.‎

He also announced plans impose stiff tariffs on imports of steel and aluminum, calling certain partners for further opening their economies to U.S. ‎goods and services, as well as reducing the role of state intervention and ‎allowing a greater role for market forces.

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