The South Korean central bank is considering publishing the amount of foreign currency purchases it carries out for the finance ministry, as the U.S. continues to closely monitor the country’s economic trends and foreign exchange policies.
The finance ministry and the Bank of Korea announced they are mulling plans to advance the FX market as the International Monetary Fund continues to urge major economies to increase transparency in its foreign-exchange interventions and reserve holdings. The central bank plans to disclose its interventions data with a time lag, yet no decision has been made on details of such plans.
In its latest twice-yearly foreign currency report, the U.S. Treasury voiced concern over economic policies of its major trading partners, including Korea, and put them on a new monitoring list, mostly due to their large surpluses
However, South Korea’s regulators had denied they are intervening in the currency market. The central bank repeatedly said that it had ceased its interventions, and that the Won was near its equilibrium level, even though it engages in “smoothing operations against extreme one-sided movements.”
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The United States has for years called for countries with current account surpluses to establish effective communication channels and respond to its concerns over the exchange rates.
South Korea was found to have both a material current account surplus and have made persistent net foreign currency purchases, prompting the United States to call on it to limit FX interventions to exceptional circumstances and increase transparency.
Trump’s administration also criticized China and Germany for running “an extremely large and persistent bilateral trade surplus” with the United States, by far the largest among any of the major U.S. trading partners.
He also announced plans impose stiff tariffs on imports of steel and aluminum, calling certain partners for further opening their economies to U.S. goods and services, as well as reducing the role of state intervention and allowing a greater role for market forces.