Exchange rate opens lower in the 1,460-won range as talks on National Pension Service foreign exchange swap begin

On the 1st, the won-dollar exchange rate opened slightly lower. It appears to reflect increased concern about possible intervention by authorities following news that talks had begun on extending the National Pension Service's foreign exchange swap agreement.

In the Seoul foreign exchange market at 9:12 a.m., the won's exchange rate against the U.S. dollar was 1,466.45 won, down 4.15 won from the previous trading day's intraday closing price (as of 3:30 p.m.).

The rate, which started at 1,465.90 won, down 3.6 won, has since been trading with slight fluctuations.

This is because concerns grew that authorities might intervene, including foreign exchange authorities holding an emergency meeting over the past weekend to stabilize foreign exchange supply and demand.

The Ministry of Economy and Finance said it met the previous day with the Ministry of Health and Welfare, the Ministry of Trade, Industry and Energy, the Financial Services Commission, the Bank of Korea and the Financial Supervisory Service to begin detailed consultations on extending the foreign exchange swap agreement between the foreign exchange authorities and the National Pension Service, which is due to expire this year. The plan is to stabilize foreign exchange supply and demand through this.

Over the weekend, the possibility of an end to the Russia-Ukraine war increased, restoring risk appetite, which is also cited as a factor in the exchange rate's decline.

On the 30th of last month, senior U.S. and Ukrainian officials resumed talks on a proposal to end the Ukraine war in Florida, one week after they had met.

With expectations still for a Fed rate cut in December, the dollar index, which represents the dollar's value against the currencies of six major countries, remains below the 100 level.

At the same time, the won/yen conversion rate was 941.23 won per 100 yen, up 0.74 won from the previous trading day's 3:30 p.m. reference price of 940.49. The yen/dollar rate was 155.75 yen, down 0.43 won.

Oh Se-sung Hankyung.com reporter sesung@hankyung.com