Ultima Markets[Market Hotspot] South Korean government intervention in stock and foreign exchange markets...

The Korean won has emerged from its decline and regained its vitality in November

11In the month of the month, due to the general weakness of the US dollar, the exchange rate of the Korean won against the US dollar has touched since last month11Month low point 1356 Appreciate to1310Left and right. The more dovish tone of the Federal Reserve and the end of interest rate hikes have prompted appreciation.

In addition, due to increased foreign investment in the stock market, the value of the Korean won has further increased. At the same time, the South Korean authorities have decided to extend the short selling ban until at least June of the following year. However, due to factors such as geopolitical risks, hedging, and widening interest rate differentials between South Korea and the United States, the exchange rate of the Korean won against the US dollar has continued to decline by approximately this year4%。

Bank of Korea(BOK) stay 2 The month stopped raising interest rates, while the Federal Reserve 9 Interest rate hikes only stopped on a monthly basis. In order to curb the depreciation of the Korean won, the Bank of Korea intervened throughout the yearforeign exchangeMarket, leading to10The monthly foreign exchange reserve has decreased4,128.7100 million US dollars, for2020year6The lowest level since the beginning of the month.

(USD/KRW Year Chart)

Foreign exchange reserves hit their lowest level in over three years

According to the Bank of Korea（BOK）South Korea's foreign exchange reserves have declined for the third consecutive month as they were used to stabilize the foreign exchange market. to10At the end of the month, the foreign exchange reserve is4,128.7Billion US dollars, decreased from last month12.4USD100mn Reserve includes3,699.8Billion dollar securities188.7A deposit of billions of dollars147.7Special Drawing Rights of billions of US dollars47.9Billion dollars worth of gold bars and44.5A billion dollar position in the International Monetary Fund.

by9At the end of the month, South Korea remained the ninth largest holder of foreign exchange reserves in the world. Despite the downward trend, the central bank of the country is not worried, Its president, Li Changyong 10 In the latter half of the month, from 2021 Since the beginning of the year, reserves have remained stable, and further increase in reserves will come at a cost.

(Foreign exchange reserves, Bank of Korea)BOK）

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