SEOUL: South Korea believes the won will be in an "extraordinarily" balanced state for a considerable period and is determined not to intervene to weaken it to boost exports, top policymakers told Reuters.
Exports and imports both fell in September from a year earlier, although not as sharply as markets had expected, supporting views the central bank will cut interest rates again this week.
But the officials said exports were more resilient than headline numbers indicated, noting for example that fewer deliveries of big-ticket items such as new ships could skew the data.
Recent monetary policy easing in major economies will not likely cause heavy capital inflows, they added.
The won has firmed nearly 4 percent against the US dollar so far this year, but is still cheaper than the currencies of its trade rivals such as Japan and China when measured over a longer period, and the current account is firmly in surplus, they said.
The remarks, made in recent weeks on separate occasions, came amid further signs of weakening domestic demand in South Korea, even as external demand continued to deteriorate in the face of Europe's long debt crisis and a slowdown in China.
"That will do more harm than good," Finance Minister Bahk Jae-wan told Reuters recently, when asked if he would seek to weaken the won to boost exports, while describing the won as being in an extraordinarily balanced state.
"On one hand, we have the mission of entering into an advanced economy's status. We have to enter into an advanced economy's status and (regarding that) there is an issue of imbalance between domestic demand and exports," he added.
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