US urges Korea's greater exchange rate flexibility
WASHINGTON (Yonhap) -- The United States government said Friday it will keep pressing South Korea to refrain from interventions in the foreign exchange market.
"The Korean authorities continue to intervene in the foreign exchange market, and the won remains weak compared to its pre-crisis levels," the Department of the Treasury said in a semiannual report to Congress on international economic and exchange rate policies.
"We will continue to press the Korean authorities to limit their foreign exchange interventions to the exceptional circumstances of disorderly market conditions and adopt a greater degree of exchange rate flexibility," it added.
The reaffirmation of Washington's firm stance comes as Seoul struggles to deal with fluctuations of the Korean currency, the won, attributable to talks of a possible exit by Greece from the troubled euro zone.
The won has rapidly declined since early May.
The won was traded at 1,185.5 against the U.S. dollar in Korea Friday.
The department pointed out that South Korea's foreign exchange reserves grew by $11 billion to $298 billion in 2011. In the first four months this year, South Korea had accumulated an additional $10 billion in reserves.
"Korea continues to maintain a series of measures aimed at reducing short-term external debt and the exposure of the financial system to foreign exchange risk," it said.