Lee Jae-myung, the president, said about the exchange rate, "The current rate does not appear to be normal," adding, "I see it as a temporary phenomenon."
At a press conference marking the first anniversary of his inauguration held at the Blue House State Guest House on Aug. 8, the president took a question on the exchange rate and said, "The mid-1,500 won level is indeed high," but added, "I view it as temporary."
The president cited rebalancing as a reason for the recent rise in the exchange rate. He explained, "In the Korea stock market, the foreign ownership share has risen by about 2–3 percentage points, and from the perspective of investment funds, the share of Korea-held assets within the fund suddenly grew," adding, "Because they must maintain their internal rebalancing ratios, they end up selling, and after selling they convert won into dollars, which increases demand."
The president said, "I see this as the biggest factor in the (exchange rate) rise, but it cannot continue, so it will find balance at some point."