Korea continues to intervene in currency markets

For longer than I care to remember, the U.S. and other developed nations have accused China of blatant currency manipulation and clamored for China to revalue the yuan. This has deflected attention away from Korea, which continues to intervene in forex markets. Korea’s currency, the Won, has appreciated 8% against the USD in the first four months of this year. In an effort designed to curb the Won’s rise, the Central Bank of Korea has announced it will issue more currency stabilization bonds. These bonds enable the Bank to purchase massive quantities of USD in a transaction that should theoretically depress the Won. TCS Daily reports:

It turns out that the won closely shadows the yen and has developed a similar linkage to the yuan. Therefore, little ground will be lost in terms of the pricing of export goods with Korea's primary competitors.

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