(Jan 21): South Korea’s President Lee Jae Myung said the country’s beleaguered currency may strengthen and stabilise at around the 1,400 to a dollar level within the next two months.
The currency’s recent depreciation “isn’t unique to South Korea,” Lee said at a press conference on Wednesday, pointing out how Japan’s yen had undergone even more pressure.
“We have achieved a record-high US$700 billion in exports, the trade balance remains in surplus, and growth is recovering, yet the exchange rate is hovering at levels seen last year,” he said, referring to a period when the currency neared a 17-year low.
“We will continue to explore possible means and strive to stabilise the exchange rate,” he added.
The won has dropped more than 8% against the dollar since the start of the second half of 2025, with a series of measures and market intervention by policymakers failing to slow its decline towards its weakest level since the global financial crisis. Lee on Wednesday said arresting the drop would be hard to resolve “through our own policies alone”.
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Korea’s pledge last year to invest a total of US$350 billion in the US, as part of its trade deal, has stoked growing concerns over the nation’s ability to finance the capital outlay. On Tuesday, a person familiar with the matter told Bloomberg News that the government would hold off on fulfilling a pledge to invest as much as US$20 billion in the US this year given the pressure on its currency.
A key driver of downward pressure on the won has been Korean retail investors’ strong preference for US stocks. Their holdings hit a new record of nearly US$172 billion this month, according to data from the Korea Securities Depository.
“Compared to Japan, ours has depreciated less,” he said, referring to the country’s currency. If the won had fallen as the yen has, it would be hovering around 1,600 won, he said, adding that the won was “holding up relatively well”.
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“The USD/KRW exchange rate is expected to fall to around 1,400 won in a month or two,” he said.
The won rose after the president’s comments, up as much as 0.6% to 1,468.90 a dollar as of 10:41am in Seoul.
“The won, which had failed to follow the broader global dollar weakness, rebounded after the president’s comments, prompting demand to unwind bets on dollar strength,” said Gyeong-Won Min, an economist at Woori Bank.
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