By Jihye Lee and Fabiana Negrin Ochoa
South Korean authorities urged banks to step up measures against what they described as "speculative market-disrupting behavior," after the won slumped to its weakest level since 2009 amid escalating Middle East tensions and speculation the Federal Reserve could raise rates by the year-end.
The Financial Supervisory Service, the country's financial regulator, held an emergency meeting Monday with Bank of Korea officials and executives from major domestic lenders, including KB Kookmin Bank, Shinhan Bank, Hana Bank and Woori Bank.
The Bank of Korea and the Financial Supervisory Service will conduct inspections, with strict measures to be imposed if warranted, according to a statement. Authorities also warned against profit-taking activities that capitalize on a weaker won.
Participants discussed the need to closely analyze the impact of offshore nondeliverable forward, or NDF, trading on the domestic foreign-exchange market, the FSS said. The regulator added that it had asked participating banks to actively cooperate with the effort.
