South Korea and the United States have agreed to work together on addressing the Korean won’s persistent weakness. The agreement came out of a meeting between South Korean Deputy Finance Minister Moon Ji-sung and US foreign exchange officials in Washington. The core message: both governments believe the won’s depreciation is out of step with South Korea’s actual economic health, and they’re ready to do something about it.
A currency under siege
The won has been trading around 1,518 to 1,520 per US dollar, levels that represent a decline of over 11% across the past 12 months.
In January, the US Treasury flagged something interesting in its assessment: the pressures driving the won lower didn’t appear to match South Korea’s strong underlying economic fundamentals.
By May, South Korean authorities had escalated their rhetoric, warning publicly about “excessive” movements in the won and signaling readiness for decisive market interventions.
