S. Korea does not intentionally intervene in FX market: official

South Korea does not intervene in the foreign exchange market to artificially keep its currency weak, a finance ministry official said Friday, stressing that Seoul only engages in smoothing operations to counter volatility.

The official, who did not wish to identified, said the government does not have a set goal when it comes to exchange rates, responding to yet another U.S. request for cutbacks in South Korea's currency interventions.

"Foreign exchange is determined by the market, with the government only taking steps in exceptional occasions," he argued.

The government only gets involved when dealing with market distortions that need to be smoothed out and that such actions are practiced by other countries as well, he stressed.

The official hinted that the government will continue to take steps to reduce market volatility if the need arises.

The remarks came after the U.S. Treasury Department reportedly urged South Korea overnight to minimize its currency interventions to keep the Korean won weak.

Washington, moreover, said it is intensifying its engagement with Seoul on foreign exchange matters.

The U.S. previously called on Seoul to refrain from intervening in the foreign exchange market in April and October of 2014.

The finance ministry and the Bank of Korea, as a rule, do not comment on announcements made by the U.S. Treasury Department, and have always maintained that market forces dictate exchange rates.

The South Korean won has depreciated 8.8 percent against the U.S. greenback in the last three quarters, making its exports cheaper in overseas markets. (Yonhap)