Bank of Korea governor nominee Shin Hyun-song said on the 31st that there is "no major concern in the current situation" regarding the won-dollar exchange rate level. The rate opened at 1,519.9 won, up 4.2 won from the previous day. It is the highest level since Mar. 10, 2009 (1,554 won), during the financial crisis.
Shin stated accordingly to reporters on the way to the personnel hearing preparation office set up at Hanwha Finance Plaza in Jung-gu, Seoul, on Tuesday morning.
Shin said, "The exchange rate level is high, but dollar liquidity is quite sound," adding, "It does not seem necessary to directly link the exchange rate to financial instability right now."
Specifically, Shin said, "Recently, many foreign investors have been lending dollars through foreign exchange swaps and borrowing won to invest in the bond market," adding, "Dollar funding appears to be quite ample, so the risk seems low."
Shin cited the Middle East situation as the biggest risk factor for the Korean economy. Shin said, "In the short term, the Middle East situation is an upward factor for prices and a downward factor for the economy," adding, "In particular, difficulties in the vulnerable institutional sector are intensifying, so it is necessary to ease them through policy measures such as a supplementary budget."