▲ A currency exchange booth at Incheon International Airport
Amid growing foreign exchange volatility driven by the recent sharp rise in the won-dollar exchange rate, authorities are launching inspections into institutions, including foreign banks, to determine if there has been any speculative trading or market manipulation.
The Ministry of Finance and Economy announced that the Bank of Korea and the Financial Supervisory Service will begin joint foreign exchange inspections of major foreign exchange banks starting today (June 10).
According to sources in the banking sector and financial authorities, the inspections are expected to focus primarily on foreign banks.
The Ministry of Finance and Economy stated that the inspections are being conducted in accordance with the Foreign Exchange Transactions Act and its enforcement decree, utilizing a combination of document reviews and on-site visits.
The ministry explained that the focus of these inspections is to "check for activities that hinder the stability of the foreign exchange market, such as manipulating or fixing foreign exchange rates for the purpose of gaining unfair profits or enabling third parties to do so."
Authorities are expected to closely examine transactions intended to disrupt market functions or interfere with the price discovery process, as well as one-sided trading conducted at specific times with volumes exceeding customer orders for the purpose of moving prices to the disadvantage of customers.
The Ministry of Finance and Economy emphasized that if any illegal activities are uncovered during the joint inspections, relevant agencies will take stern action in accordance with the law.
The Foreign Exchange Transactions Act stipulates that those who undermine sound trading order by manipulating or fixing foreign exchange rates to gain unfair profits or provide such benefits to third parties can be punished by up to five years in prison or a fine of up to 500 million won.
※ Please note: This article was translated by AI and may contain errors.