South Korea imposes cap on FX forward positions
South Korean authorities will impose tighter limits on the amount of currency derivatives banks are allowed to hold, in a policy change aimed at limiting foreign capital inflows through forward trades.
In a statement released on May 19, the Ministry of Strategy and Finance, the Financial Supervisory Commission, the Bank of Korea and the Financial Supervisory Service lowered the ceiling on banks' foreign exchange forward positions by 20%.
"The new limit is aimed at curbing foreign capital inflows
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