Seoul: The Korean won has remained relatively weak in recent months, but the country has sufficient dollar liquidity to respond to external shocks, Shin Hyun-song, nominee for the head of South Korea's central bank, said Wednesday. Shin made the remarks during a confirmation hearing at the National Assembly in Seoul, as he has been tapped to replace outgoing Bank of Korea (BOK) Gov. Rhee Chang-yong.

According to Yonhap News Agency, Shin stated that while it is not appropriate to comment on the specific level, the won-dollar exchange rate has stayed at a high level over the past few months. Shin emphasized that excessive currency depreciation is not desirable, highlighting the importance of maintaining balance in currency valuation.

The nominee assured that South Korea's foreign exchange reserves are adequate to act as a buffer against external economic disruptions. He identified offshore transactions as a significant factor contributing to the won's weakness, mentioning the influence of offshore non-deliverable forward (NDF) trading in the currency's depreciation.

Shin expressed his intention to promote the Korean won's global usage and to establish an offshore settlement system to better manage the exchange rate and enhance the currency's international standing. The won had previously hovered around the 1,500 won-per-dollar mark, later easing to approximately 1,450, as geopolitical tensions in the Middle East pushed up global oil prices and affected global markets.