Bank of Korea board member says ‘can’t sit and do nothing’ about a weaker won

SEOUL, Dec 10 (Reuters) – A board member of South Korea’s central bank said on Wednesday foreign exchange authorities need to take action to curb the won’s decline against the ‍dollar, as it may reignite inflationary pressure and weaken retail purchasing power.

“As forex authorities, we can’t sit and do nothing about this high FX rate and we need to think of measures in terms of (adjusting) supply and demand,” Kim Jong-hwa, one of the seven voting members at ‌the Bank of Korea’s monetary policy board, said ‌in a news conference.

“With a rising FX rate, exporters with insufficient currency hedging capacity or small-to-medium-sized companies which cannot pass on the higher costs of intermediate goods (to consumers) will struggle,” said Kim.

“A rising FX rate also leads to higher inflation