Seoul: Financial authorities on Monday vowed to take strict action against excessive volatility and one-sided movements in the foreign exchange market amid the weakening Korean won. "We assess that, in addition to supply and demand factors, certain speculative foreign exchange transactions, such as non-deliverable forwards (NDFs), have recently contributed to increased volatility in the foreign exchange market," a joint statement from the Ministry of Economy and Finance and the Bank of Korea said.

According to Yonhap News Agency, the authorities emphasized their intolerance for excessive volatility that does not align with economic fundamentals and pledged to respond firmly to one-sided market movements. The strong verbal intervention came as the South Korean won has fallen sharply against the U.S. dollar.

As of 11:45 a.m., the Korean currency stood at 1,553 won against the dollar, down 14 won from the previous session. In the wake of the warning, the won was quoted at 1,540 won to the greenback. The latest jolt comes as the won traded at 1,539.1 won per dollar at 3:30 p.m. on Friday, down 9.4 won from the previous session. This marked the weakest level for the won since March 9, 2009.