The central bank said Wednesday it will closely monitor whether the local currency is moving excessively out of sync with economic fundamentals amid heightened tensions in the Middle East. The pledge was made during an emergency task force meeting presided over by Bank of Korea (BOK) Gov. Rhee Chang-yong, as the Korean won has fallen sharply toward a yearly low and financial markets have shown increased volatility amid concerns that the U.S.-Israel military operation against Iran could escalate into a prolonged regional war. “Though the won-dollar exchange rate briefly rose above the 1,500-won level overnight, unlike past crises, dollar liquidity remains ample and Korea’s external borrowing spreads and credit default swap (CDS) premiums are stable,” the BOK said in a statement. “Volatility in the exchange rate and other key financial indicators could persist depending on developments in the Middle East. We will closely monitor any excessive movements away from fundamentals and respond in a timely manner in coordination with the government if needed,” it added. The won opened at 1,479 per
