Market News

(Bloomberg) -- South Korea ramped up foreign currency sales in the first three months of this year as it stepped into markets to counter the rapid weakening of the won, which has since dropped to a 13-year low.

South Korean FX authorities, which include the finance ministry and the Bank of Korea, sold a net $8.3 billion of their foreign exchange reserves to prop up the currency throughout the first quarter of this year, data released on the central bank’s website showed. That’s the largest amount since at least March 2019 when the BOK started to publish the data, initially on a biannual basis.

The won plunged 1.9% against the dollar in the first quarter, and has dropped another 6.7% since to become emerging Asia’s worst performing currency. Higher energy prices and risk aversion among investors topped with concerns that rapidly rising interest rates will hurt the South Korean economy have sent the won to its biggest monthly decline since 2011.

Since March, the Bank of Korea has cited market stabilization as one of the reasons for the drop in foreign reserves and the currency hoard has been on a downward trend since November. It fell to $447.7 billion in May, the lowest in more than a year.

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The Bank of Korea discloses the net trading amount of official interventions with a delay of three months. Second-quarter data is due for release at the end of September.