South Korea Spends $23 Billion in Defending Won
It was found that foreign exchange authorities injected nearly $10 billion in foreign exchange reserves in the second quarter as well to stabilize the exchange rate. Combined with the net selling amount in the first quarter, it exceeds $20 billion.According to the ‘Details of Market Stabilization Me
South Korea allocated $23 billion in the first half of 2024 to defend its currency, the won, against fluctuations. To stabilize the exchange rate, foreign exchange authorities injected nearly $10 billion into reserves in the second quarter alone, surpassing the $20 billion net selling amount from the first quarter. This trend of net selling has persisted for seven consecutive quarters since the fourth quarter of 2024.
The Bank of Korea and the government intervene in the foreign exchange market by buying or selling currency when exchange rates fluctuate rapidly. The upward trend in the won-dollar exchange rate, reaching an average of 1466.9 won in the first quarter and 1501.6 won in the second quarter, was attributed to foreign investors selling domestic stocks amid a strong dollar following the United States, Israel-Iran war.
Despite the foreign exchange authorities' intervention, the exchange rate continued to rise, reaching 1501.6 won in the second quarter.
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