On the 15th, the won-dollar exchange rate against the U.S. dollar ended weekly transaction (9 a.m.–3:30 p.m.) at 1,469.7 won, down 7.8 won from the previous day. It was influenced by U.S. Treasury Minister Scott Bessent's overnight statement that the recent weakness of the won is excessive relative to Korea's economic fundamentals.
◇ Despite U.S. Treasury's verbal intervention… market-calming effect is temporary
At 11:03 p.m. the previous day, Minister Bessent posted on social networking service X (formerly Twitter), "(With Koo Yun-cheol, Deputy Prime Minister and Minister of Strategy and Finance) we discussed that the recent weakness of the won is not consistent with Korea's solid economic fundamentals." He posted it after holding a bilateral meeting with Deputy Prime Minister Koo in Washington, D.C., on the 12th (local time).
It is unusual for the U.S. Treasury Minister to mention a "weak won." Choi Ji-young, Deputy Minister for International Economic Affairs at the Ministry of Strategy and Finance, said, "To my knowledge, it is the first time the U.S. Treasury Minister has mentioned Korea's won through something like (SNS)."
Thanks to this, the won-dollar exchange rate opened at 1,465 won, down 12.5 won from the previous day. Right after the opening, it fell to as low as 1,457.5 won. But the effect of Minister Bessent's remarks did not last long. The won-dollar rate, which paused early in the session, gradually rose and pared losses. By 1:56 p.m., it had jumped to 1,476.6 won. That was still about 1 won lower than the previous day's close (1,477.5 won), but 11.6 won higher than the opening price that day (1,465 won). As a result, it also finished transaction in the 1,470-won range.
On why the won-dollar rate did not stabilize despite Minister Bessent's remarks, Jo Yong-gu, a researcher at Shinyoung Securities, said, "(Minister Bessent's comments) were verbal intervention, so they had no real impact on supply and demand." Still, he added, "The 1,480-won level for the won-dollar rate signaled a level that is uncomfortable not only for Korea but also for the United States."
◇ Effect of Korean authorities' intervention also did not last long
Earlier, Korea's foreign exchange authorities also issued strong verbal intervention remarks and announced three tax support measures for foreign exchange stability, but the effect was temporary. At 9 a.m. on the 24th of last month, the Ministry of Economy and Finance (now the Ministry of Strategy and Finance) and the Bank of Korea said, "(Holding interagency meetings related to the foreign exchange market) was a process of organizing the situation to demonstrate the government's strong resolve and comprehensive policy execution capacity, which you will soon see." An hour later, they announced three tax support measures for foreign exchange stability that would grant tax benefits for selling overseas stocks and buying domestic stocks.
As a result, the won-dollar rate fell 33.8 won (1,483.6→1,449.8 won) in a single day. But in the new year, the won-dollar rate trended upward, and within 11 transaction days of the measures being announced, it climbed back into the 1,470-won range.