Regulator to probe 'irregular' currency trading

(ATTN: UPDATES with market close in para 3; ADDS more info at bottom)
SEOUL, Oct. 8 (Yonhap) -- South Korea's financial watchdog said Wednesday it plans to investigate allegations that some currency dealers are violating trading rules, as the local currency continued its freefall.

The Financial Supervisory Services (FSS) said it will be receiving findings
conducted by local banks regarding alleged currency trade irregularities until
Friday, and will conduct on-the-spot investigations if necessary.
The announcement came as the South Korean currency tumbled to a 10-year low,
closing at 1,395 won against the dollar Wednesday, down 66.9 won from the
previous session. The currency has declined more than 32 percent per the
greenback so far this year. Uncertainty surrounding a global credit crunch has
deepened worries over foreign currency liquidity.
South Korea's finance minister Kang Man-soo said Tuesday during a parliamentary
audit that the country's foreign exchange market is responding excessively to the
global financial crisis.
"The government judges that there is demand from speculative forces and it plans
to look into speculative trading," Kang added.
Kim Jong-chang, governor of the FSS, said in early September that the watchdog is
cautiously looking into rumors that currency dealers are engaged in trading in
violation of related regulations. Kim said that there has been some talk that
illegal trading is contributing to volatility in the currency market.
sooyeon@yna.co.kr
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