SEOUL, Nov 7 (Reuters): South Korean authorities won't sit on their hands while a tumbling yen undercuts the country's export competitiveness, the central bank chief said on Friday, but policymakers could be reluctant to reduce interest rates, and currency intervention offers limited relief.
The relative strength of the Japanese and South Korean currencies is a sensitive topic in Seoul, given the rivalry between the two countries, and the yen has dropped 30 per cent against the won in the past two years.
Bank of Korea Governor Lee Ju-yeol said on Friday that while there are limitations to South Korea's ability to counter the weakening yen, "we will not stand pat."
A South Korean finance ministry official told Reuters that the government will work towards keeping the won from moving out of sync with global exchange rates, an indication it will not target the yen specifically.
The won fell about 1 per cent on Thursday after Vice Finance Minister Joo Hyung-hwan was quoted as saying the government would manage the dollar-won rate to align it with the weakening yen, although the finance ministry later said the comment was misunderstood and the currency regained most of its losses.
The current weakening of the yen follows a decision last month by the Bank of Japan to dramatically expand its debt-buying stimulus drive, pushing down bond yields and sending the yen to 115.52 against the dollar on Thursday, its weakest in seven years.
Korea won\\\'t stand by as weak yen hits competitiveness
FE Team | Published: November 08, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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