South Korea Implements Rare Dollar Sell-Off, Won Reaches Nine-Month High

On July 31, South Korea's foreign exchange authorities carried out a rare dollar sell-off intervention on Thursday, pushing the won to a nine-month high. The won appreciated by 2% against the dollar on Thursday, reaching 1,418.0 won per dollar, the strongest level since October 20 of last year. The won had previously hit a 17-year low of 1,561.50 last month and has risen over 8% this month, on track for the largest monthly gain since March 2009. There are market speculations that South Korea and Japan conducted a joint intervention, as both countries had previously stated they would closely coordinate. A foreign exchange official from the South Korean Ministry of Finance declined to confirm the intervention. On July 2, the Deputy Minister of Finance stated that Seoul is maintaining close communication with Japan and other key allies regarding foreign exchange issues. Japan's top foreign exchange official stated on July 7 that Tokyo is closely communicating with Seoul's foreign exchange officials, citing that the financial markets of the two countries sometimes exhibit similar volatility patterns.

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