Now Seoul has entered the Chinese peg fracas. Unlike China, Hong Kong and Malaysia, Korea does not peg to the dollar, and unlike Japan and Taiwan, does not intervene nearly as dramatically to halt the gradual rise of its currency, the won, as the dollar as dropped.
Kwon Tae-shin, deputy finance minister, said in an interview with the Financial Times that South Korean exports were being priced out of the market by those from countries that were keeping their currencies artificially cheap.A critical mass may be building for at least a revaluation of the renminbi, a move which could have huge consequences for global rebalancing.
He said Seoul had allowed its currency to appreciate more than other Asian countries as the dollar has weakened over the past few months.
"Korea is always arguing, whenever we talk to other Asian countries, that the market should set the value of currencies," he said. "If every country intervenes to depreciate their currency against the dollar, it creates a beggar-my-neighbour situation. Korea is keeping up with the market more than other currencies in Asia."