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South Korea Protests Financial Times' Report Alleging It's A Currency Manipulator

By February 16, 2017 at 6:49 am
In 2016, South Korea posted a US$23.3 billion trade surplus with the United States. (Photo : Getty Images)

South Korea protested a media report that suggested that it has engaged in currency manipulation, a government official said Thursday. The Financial Times has received the letter of protest from Seoul over its recent news report that the government intentionally devalued the Korean won.

The government is referring to the daily newspaper's article titled "Donald Trump's anger at Asian currency manipulators missed target". South Korea was tagged along with Taiwan by FT as "obvious culprits" of currency manipulation, according to a news report by the Yonhap News Agency.

The FT story read that there's evidence that South Korea and Taiwan, not China and Japan, are the worst offenders of currency manipulation.

According to the newspaper, both South Korea and Taiwan do not clearly declare their currency intervention. As a result, South Korea's current account surplus is around 8 percent of GDP, which compares to only 3 percent of GDP for China and Japan.

South Korean officials have rejected claims that they have deliberately weakened the won to gain competitive advantage, though they acknowledge they sometimes conduct "smoothing" operations when there's increased volatility in the currency market.

The article came as the United States government is considering the idea of tagging some countries like China and Japan as currency manipulators, due to their huge trade surpluses against the US. 

South Korea, Asia's fourth-biggest economy, recorded a US$23.3 billion trade surplus with the US in 2016, which accounts for 26 percent of Seoul's total trade surplus.

Korea was among the countries that were placed by the US Treasury Department under their currency watch list in October. Other countries in the list are China, Japan, Taiwan, Switzerland and Germany. 

South Korea's Finance Minister Yoo Il-ho earlier downplayed the possibility that South Korea would be tagged as a currency manipulator since under the current US guidelines to monitor currency practices, it only met two out of three. 

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