▲ Bank of Korea Governor Shin Hyun-song delivers opening remarks at the second plenary session of the National Assembly's Strategy and Finance Committee held on July 9.
Bank of Korea Governor Shin Hyun-song stated today (July 9), "I believe there is significant potential for the Korean won to shift toward a stronger trend."
Governor Shin made the remarks during a plenary session of the National Assembly's Strategy and Finance Committee this morning in response to a related question from Democratic Party of Korea lawmaker Moon Jin-seok, noting, "The current account surplus is accumulating to a very large extent."
Regarding a currency swap between South Korea and the United States, he said, "There are consultations between governments, and discussions are always taking place within the framework of cooperation between central banks," adding, "Such a mechanism would likely have a significantly positive impact, both symbolically and psychologically."
However, he drew a line by stating, "(A currency swap) is a mechanism intended to provide liquidity when it is exhausted," and added, "In the current situation, there is no shortage of liquidity."
Regarding the recent factors driving the rise in the exchange rate, he said, "The dollar is strong due to the possibility of changes in U.S. monetary policy," and added, "Domestically, there are also factors such as portfolio rebalancing by foreign investors."
He added, "While supply and demand are important determinants in the short term, I believe there is also a fundamental value in the long term."
This is interpreted to mean that, considering the fundamental value of the won, there is room for the excessive rise in the exchange rate to ease.
(Photo: Yonhap News)
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