By Cynthia Kim and Yena Park
SEOUL (Reuters) – South Korea’s currency authorities view the 1,385 level as a line in the sand for the won against the dollar, two sources involved in the policy discussions told Reuters on Tuesday, citing recent measures to halt the currency’s weakness.
The Bank of Korea and the Ministry of Finance were preparing measures to intervene in the spot market if it exceeded the 1,385 level by the end of May, the sources said, requesting anonymity due to the sensitivity of the matter.
“Authorities were waiting to see whether the won would weaken above the 1,385 level to determine the timing of measures to support the won,” one of the sources said, referring to his talks with currency authorities.
A rapid weakening of the won has caused headaches for policymakers in Asia’s fourth-largest economy as the currency has lost 6.5% against the dollar so far this year.
The won fluctuated around 1,381.6 per dollar on Wednesday.
On May 31, the Treasury Department said the Bank of Korea and the National Pension Fund are in talks to expand their $35 billion FX swap line, a program that allows the fund to borrow the central bank’s currency reserves instead of dollars to buy on the mainland. currency market.
