S. Korea closely watches currency market situations: finance ministry

SEOUL, Sept. 15 (Yonhap) -- South Korea is closely watching currency market conditions as volatility increases amid growing concerns over fiscal woes in Europe, a senior finance ministry official said Thursday.

"In any direction, excessive fluctuations in the currency exchange rates are not desirable," Eun Sung-soo, head of the finance ministry's international financial bureau, told reporters.

"We are now closely watching the market situations."

The remarks come as the local currency has been suffering turbulent trading recently. Volatility is deepening over growing concerns over the fiscal debt crisis unfolding in some European countries.

The won was trading at 1,116.2 won against the dollar as of 2:29 p.m., down 8.4 won from the previous day. It fell to as low as around 1,120 won in intra-day trading but gained back some ground following the verbal intervention, the first of its kind in 17 months.

On Wednesday, the currency plunged more than 30 won from Friday's close on the news that Moody's Investors Service cut its credit ratings on two major French banks, citing their exposure to Greece struggling with deepening credit default woes.

Finance Minister Bahk Jae-wan earlier said that there is no reason to panic on the increased volatility given the nation's fiscal health, short-term borrowings and the overall financial situations.