South Korea and the United States have agreed to maintain close cooperation in addressing the weakness of the South Korean won. The agreement signals a shared concern over disorderly currency movements that could destabilize trade and financial markets, though no immediate intervention was hinted at.
The agreement between South Korea and the US to cooperate on currency stability signals a coordinated effort to manage potential disruptions from a weakening won, which could impact trade, investment flows, and regional financial markets. It also highlights the broader economic coordination between the two allies on issues ranging from currency markets to strategic investments and supply chain sec
South Korea and the United States have agreed to maintain close cooperation in addressing the weakness of the South Korean won, according to top South Korean foreign-exchange officials. Deputy Finance Minister Moon Jisung stated that he discussed currency market trends with his US counterparts in Washington, emphasizing that the won's recent decline appears excessive relative to South Korea's economic fundamentals. The two sides committed to working together to address the soft currency.
Finance Minister Koo Yun-cheol and U.S. Treasury Secretary Scott Bessent met on Friday in Washington, D.C., on the sidelines of the G20 Finance Ministers and Central Bank Governors Meeting. A statement from South Korea's Ministry of Finance and Economy indicated that the officials agreed excessive won volatility is undesirable and pledged to continue consultations on foreign exchange market developments. This agreement signals a shared concern over disorderly currency movements that could destabilize trade and financial markets.
The meetings occurred as the won has faced persistent pressure against a strong U.S. dollar, driven by global risk aversion, high U.S. interest rates, and regional geopolitical tensions. A senior Cheong Wa Dae official noted that the U.S. Treasury deeply understands Korea's circumstances and is observing the situation, stating that an exchange rate moving in line with fundamentals is of interest to both countries. The won-dollar exchange rate has been hovering around the 1,500-won level.
Deputy Minister Moon's trip to the U.S. also comes amid concerns that the won's decline could impact South Korea's $350 billion investment pledge in the United States. A safeguard in a joint fact sheet allows for adjustments to the timing and size of investments if foreign exchange market instability emerges. While there is no specific investment level tied to the exchange rate, officials indicated that stabilization would be beneficial for discussions on U.S.-bound funds.
Discussions also encompassed the economic impact of the conflict involving Iran and collaborative measures to stabilize global supply chains for critical minerals. The U.S. endorsement of Korea's investment bill is viewed as a positive step for bilateral economic ties, potentially unlocking capital flows and strengthening industrial partnerships.