On Wednesday, U.S. Treasury Secretary Scott Bessent discussed the recent depreciation of the South Korean won during a conversation with South Korea's Finance Minister Koo Yun-cheol. Bessent remarked that the currency's weakening does not reflect South Korea's strong economic fundamentals, underlining the currency fluctuations as excessive and undesirable.
Following these remarks, the Korean won experienced a significant rebound, appreciating by as much as 1.15% to trade at 1,462.0 per dollar. This increase came after a prolonged period of decline marked by 10 consecutive sessions of losses, bringing the won to its weakest point since December 24.
The two officials met on Monday, where besides foreign exchange matters, they also discussed cooperation on critical minerals and approaches to deepen economic ties between their nations. The U.S. Treasury Department highlighted that Bessent emphasized the importance of stability in foreign exchange markets and reaffirmed South Korea's essential role in the Asian region due to its robust economic performance, particularly in key sectors that support the American economy.
In a public statement on social media platform X, Secretary Bessent reiterated that the won's recent downward trend did not correspond with South Korea's strong economic fundamentals.
The South Korean Ministry of Finance confirmed the meeting and acknowledged discussions centering on the current conditions of the foreign exchange market. Finance Minister Koo earlier committed to implementing measures to manage the growing volatility of the domestic currency and address the imbalance between dollar demand and supply. These remarks were made during a virtual forum in Seoul focused on foreign exchange policies.
Moreover, the ongoing economic dialogue follows a significant bilateral trade agreement finalized in November, which lowered U.S. tariffs on South Korean imports. In exchange, South Korea pledged a $350 billion investment in strategic sectors within the United States. This agreement was the culmination of extensive negotiations that also encompassed discussions around the foreign exchange implications of the investment.
The Treasury Department noted that Bessent expressed optimism about the smooth implementation of the agreement and engaged with Minister Koo on ensuring its complete and faithful execution.