South Korean authorities pressed banks to strengthen controls on speculative trading after the won tumbled to its weakest level since 2009, rattled by Middle East tensions and expectations for Federal Reserve rate hikes. The Financial Supervisory Service convened an emergency meeting Monday with central bank officials and major lenders to address mounting foreign exchange volatility.

Participants included KB Kookmin Bank, Shinhan Bank, Hana Bank, and Woori Bank, along with Korean branches of HSBC and Standard Chartered. Regulators warned that profit-taking on a weaker won could amplify market disruption and ordered inspections of banks' trading practices. The coordinated response signals growing concern over capital outflows and currency instability.

Authorities zeroed in on offshore nondeliverable forward trading, which they blame for distorting the domestic forex market. These derivatives, accessible to international investors, can amplify currency movements without requiring physical delivery. The FSS demanded active cooperation from participating banks.

The intervention comes as South Korea grapples with external pressures on its export-dependent economy. With the won testing levels not seen in over a decade, policymakers face a delicate balancing act between market discipline and financial stability.