Seoul: South Korea's finance minister has pledged to take "immediate measures" to counter excessive volatility in the foreign exchange market, following a significant decline of the Korean won against the U.S. dollar.

According to Yonhap News Agency, Finance Minister Koo Yun-cheol held discussions with Bank of Korea Governor Shin Hyun-song, Financial Services Commission Chairman Lee Eog-weon, and Financial Supervisory Service Governor Lee Chan-jin in Seoul. The discussions focused on strategies to address the recent fluctuations in the currency market, as reported by the Ministry of Finance and Economy.

Minister Koo emphasized the government's commitment to monitoring the situation closely to prevent external uncertainties from escalating market concerns. "The government is currently monitoring the situation with vigilance so that external uncertainties do not lead to growing market anxiety," Koo was quoted as saying. He reassured that the government is prepared to take swift action to mitigate excessive market swings.

Officials indicated that recent volatility in the foreign exchange market has been influenced by the Middle East conflict and consistent net selling by foreign investors in the stock market. The finance ministry noted that the recent surge in the local stock market prompted temporary rebalancing by foreign investors, who sought to capitalize on profits, thereby contributing to additional volatility.

Despite these challenges, financial officials expressed confidence in the resilience of the South Korean economy. They highlighted that exports surged by 53.2 percent on a year-on-year basis in May, and the local stock market capitalization now ranks as the sixth largest globally. Nonetheless, they acknowledged concerns over the rise in margin loans within the stock market and emphasized the need for vigilance in order to safeguard investors.