FX.co ★ South Korean Won Jumps on Bessent Remarks

The South Korean won surged by nearly 1% to approximately 1,460 against the dollar, partially recovering from its losses seen earlier in the year. This rally followed a rare verbal warning by US Treasury Secretary Scott Bessent, who criticized the won's sharp depreciation. Prior to Bessent's remarks, the won had depreciated by over 2% this year, nearing its weakest value since 2009. Bessent emphasized that the currency should mirror South Korea’s robust economic fundamentals, a statement made following discussions with South Korea’s Finance Minister, Koo Yun Cheol. In response, South Korean officials are gearing up to issue foreign exchange stabilization bonds, potentially as soon as late January, with the issuance ceiling increased to $5 billion for this year. This move indicates their readiness to reinforce foreign reserves and support the currency. Concurrently, investors are focusing on the Bank of Korea’s upcoming policy decision, where interest rates are widely anticipated to remain steady amid exchange-rate volatility and high housing prices, constraining immediate monetary easing possibilities.