The government said on the 9th it will begin inspections this week into speculative transaction and market-disrupting behavior occurring in the foreign exchange market. Earlier, as won-dollar exchange rate volatility widened sharply, the government convened an emergency market stability review meeting to discuss response measures.
That day, the government held a "foreign exchange market experts meeting" to discuss response plans for stabilizing the foreign exchange market. The government said it will respond strictly to speculative transaction and market-disrupting behavior that damage market order or fuel one-sided moves in the exchange rate.
The government said it has begun preparations to inspect such behavior, and that relevant agencies will soon carry out on-site checks and inspections.
In addition, by opening a 24-hour foreign exchange market and operating an offshore won settlement system, it plans to absorb into the domestic FX market the demand for non-deliverable forwards (NDFs) identified as speculative transaction.
An NDF is a derivative that settles only in dollars for the difference between the contracted exchange rate at a specific point and the actual rate at maturity, without exchanging actual won. It is a financial product that allows investment on whether the exchange rate will rise or fall without directly holding won.