U.S. Treasury: Korea's foreign exchange intervention pattern 'balanced'

South Korea has continued to intervene in foreign exchange markets this year, but the pattern of intervention with respect to depreciation and appreciation "appears roughly balanced," the U.S. Treasury Department said Monday.

The department made the assessment in its Report to Congress on International Economic and Exchange Rate Policies, saying the won depreciated by 7.7 percent against the dollar, and 2.0 percent on a real trade-weighted basis, in the year through September.

"Treasury estimates of foreign exchange intervention using valuation-adjusted reserves indicate that Korea continued to intervene to resist pressure for the won to appreciate against the dollar in the first half of 2015 but then sold foreign exchange in July and August to limit won depreciation, so that intervention over the calendar year to date appears roughly balanced," the report said.

The report also said that the department has urged Korea to limit its foreign exchange intervention to circumstances of disorderly market conditions.

Appreciation of the won over the medium-term would help Korea reorient its economy away from its current heavy reliance on exports by encouraging the reallocation of resources to the non-tradables sector, the report said.

"The Korean authorities should increase the transparency of their foreign exchange operations," it said.

Overall, the report concluded that no major trading partner of the United States met the standard of manipulating the rate of exchange between its currency and the U.S. dollar. (Yonhap)