Ministry of Economy and Finance Again Summons Major Companies "Please Join in Stabilizing the Foreign Exchange Market"

Samsung, Hyundai Motor, SK, Hanwha, etc., summoned

Interpreted as 'Put held dollars into the market'

Won–dollar exchange rate approaching the 1,480-won level

As the exchange rate surged, the government again summoned executives of major domestic export companies in semiconductors, automobiles, and shipbuilding and asked them to join efforts to stabilize the foreign exchange market. Despite the government's measures, the won–dollar exchange rate continued its upward trend on the 16th, approaching the 1,480-won level.

The Ministry of Economy and Finance said it held a "meeting with exporting companies related to the foreign exchange market" at the Government Complex Seoul, chaired by First Vice Minister Lee Hyeong-il. Representatives of leading domestic exporting companies such as Samsung Electronics, SK Hynix, Hyundai Motor, Kia, HD Korea Shipbuilding & Offshore, Samsung Heavy Industries, and Hanwha Ocean attended the meeting.

At the meeting, the vice minister said, "Concerns about recent won volatility are growing," and emphasized, "As major exporting companies have a large impact on the national economy and people's livelihoods, individual companies' foreign exchange risk management is more important than ever." According to the ministry, the vice minister asked participating companies to actively cooperate for foreign exchange market stability, mentioning the expansion of currency hedging. It was interpreted as a message to have companies put their held dollars into the market as much as possible.

The ministry introduced to the companies the Foreign Currency Operations Support Task Force (TF), which was recently launched internally, and asked for cooperation in sharing related materials going forward. The government is reportedly planning to require exporting companies to regularly submit data such as the amount of foreign currency earned from exports, won exchange transaction performance, and overseas securities investment details. It is interpreted as an intention to induce companies to sell dollars by making them feel the burden themselves.

According to the ministry, company officials agreed that stabilizing the foreign exchange market is essential for smooth business operations and expressed willingness to cooperate with the government's request.

On the 18th of last month, Deputy Prime Minister and Minister of Economy and Finance Koo Yoon-chul held a meeting with major exporting companies including Samsung Electronics and requested cooperation for exchange rate stability.

On that day in the Seoul foreign exchange market, the won–dollar exchange rate closed the afternoon session (as of 3:30 p.m.) at 1,477 won, up 6 won.

Jung Young-hyo reporter leftking@hankyung.com