NextFin News - The South Korean government has launched a criminal investigation into the spread of "fake news" regarding the foreign exchange market, as the won struggles against a 17-year low and mounting speculative pressure. On April 3, the Ministry of Economy and Finance confirmed it had filed a formal police complaint against individuals and platforms spreading claims that the government was preparing an "Emergency Fiscal and Economic Order" to force the sale of private dollar holdings.
Moon Ji-sung, director-general for international economic policy at the Ministry of Finance and Economy, characterized the rumors as a deliberate attempt to undermine policy credibility during an "extraordinary crisis." The reports, which circulated primarily via YouTube and encrypted messaging apps, also alleged that the nation’s four major commercial banks had begun imposing strict limits on dollar exchange volumes. Moon stated that a dedicated task force responding to illegal foreign exchange transactions will now take "stern measures" against any baseless claims that trigger market anxiety.
The crackdown comes as the South Korean won remains under intense pressure, having breached the 1,530 level against the U.S. dollar in late March—its weakest point since the 2008 global financial crisis. The currency's decline has been fueled by a "triple high" of rising oil prices, high inflation, and a strengthening dollar, exacerbated by ongoing geopolitical tensions in the Middle East. While the government views the rumors as malicious fabrications, the speed at which they gained traction reflects a deep-seated nervousness among retail investors and businesses regarding the country's foreign exchange reserves.
Kim Yongbeom, the Blue House Policy Chief, has attempted to soothe these fears, arguing that the recent volatility is a "temporary result of supply-demand distortions" rather than a structural crisis. Kim, who has historically maintained a stance that South Korea’s economic fundamentals remain resilient despite external shocks, noted in a social media post on April 2 that the surge was largely driven by foreign sell-offs in the equity market. He suggested that once external shocks ease, the exchange rate has "ample room" to return to its previous trading band. However, Kim’s optimistic outlook is not universally shared; some market analysts argue that the won’s weakness is more persistent, driven by a narrowing interest rate differential with the U.S. and a deteriorating trade balance in key sectors like semiconductors.
The government’s aggressive legal response marks a shift in strategy, moving beyond verbal intervention to active policing of market sentiment. By targeting specific claims of "forced dollar sales," Seoul is attempting to draw a hard line between legitimate market analysis and what it deems "market-disrupting acts." Critics of the move, however, suggest that such crackdowns can sometimes backfire by signaling a level of official desperation that further unnerves international investors. For now, the Ministry of Finance and Economy remains focused on stabilizing the won, with the task force authorized to share information directly with law enforcement to expedite further complaints.
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