SEOUL, Jan 21 (Reuters) – South Korean authorities expect the won to strengthen to around the 1,400 per dollar level in a month or two, although domestic policies alone will not be able to stabilise foreign exchange markets, President Lee Jae Myung said on Wednesday.
“According to relevant authorities in charge, it (the dollar-won exchange rate) is expected to fall to around 1,400 after a month or two,” Lee told a press conference.
The won turned higher after Lee’s comments to strengthen as much as 0.5% to 1,468.8 per dollar, after touching earlier in the session its weakest level since December 24 at 1,481.4.
“The dollar-won rate fell sharply as traders unwound long dollar positions on the president’s comments,” one local currency trader said.
South Korean authorities have rolled out various policy measures since late last year to support a currency hovering around 16-year lows, saying the recent depreciation was not in line with economic fundamentals.
Lee said domestic policies alone would not be sufficient to reverse the recent depreciation in the won, as it was somewhat correlated with weakness in the Japanese yen, adding that the won was faring comparably better.
“We will continue to make efforts to find sustainable policy tools to stabilise exchange rates,” Lee said.
(Reporting by Cynthia Kim, Jihoon Lee and Youn Ah MoonEditing by Ed Davies)
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