South Korea’s nominee for central bank governor has pledged to take appropriate action if the nation’s currency experiences excessive declines, according to written statements he provided to lawmakers ahead of his confirmation hearing scheduled for Wednesday.
Shin Hyun-song told parliament members that while the dollar-won exchange rate has recently dropped slightly to around 1,480, the currency has fallen more dramatically than others since Middle Eastern conflicts began, creating ongoing uncertainty that requires careful monitoring of foreign exchange markets.
“Although dollar-won exchange rates recently fell slightly to the 1,480 level, their increases since the Middle East war had been bigger than other currencies and uncertainty is still high, so we will closely monitor foreign exchange market conditions,” Shin stated.
The South Korean won dropped as much as 1.1% on Monday, reaching 1,499.7 against the dollar following unsuccessful weekend negotiations between the United States and Iran aimed at ending the regional conflict.
Despite the currency fluctuations, Shin indicated that current dollar-won levels shouldn’t cause alarm given stable market liquidity conditions. He chose not to provide specific predictions about future exchange rate movements when pressed by legislators.
Regarding monetary policy direction, the nominee identified inflation pressures stemming from Middle Eastern conflicts as a primary consideration for upcoming policy decisions, according to reports from Yonhap News Agency.
Shin noted that while economic growth faces some headwinds, strong semiconductor export performance and additional government spending are helping to offset downward pressures on the economy.
Last week, South Korea’s central bank maintained its current interest rate policy while cautioning about an uncertain economic outlook, simultaneously lowering growth projections and raising inflation forecasts.
