Lee Chang-yong, the governor of the Bank of Korea, explained during a press conference following the Monetary Policy Committee meeting on the 29th that the recent decline in the won-to-dollar exchange rate is a "normalization process of abnormalities."
The governor noted, "Over the past six months, due to increased political uncertainty compared to our economic conditions, the won depreciated significantly, rising to the mid-1,400 won range. However, political factors are not currently affecting the exchange rate."
Specifically, he said, "Looking at the political uncertainty index, it rose significantly but has now returned to levels prior to the declaration of martial law in November," adding, "I am not overly worried about the impact of the exchange rate on prices as it is not depreciating (or rising)."
However, he mentioned that the exchange rate volatility is still high. The governor stated, "The U.S. government and several Asian countries are in discussions regarding tariff policy, including the exchange rate," noting that even the existence of the meetings itself changes investor sentiment, making it difficult to predict the direction.