The U.S. administration of Donald Trump on the 23rd (local time) redesignated Korea as a currency monitoring list country, saying "the foreign exchange authorities appeared to focus on easing volatility amid depreciation pressure on the won through market intervention," and assessed that "there is also progress in easing restrictions on foreign investors' participation in the foreign exchange market."
In its semiannual report submitted to Congress that day on the "macroeconomic and foreign exchange policies of major trading partners," the U.S. Treasury placed 10 countries—Korea, China, Japan, Taiwan, Singapore, Vietnam, Germany, Ireland, Switzerland and Thailand—on the currency monitoring list.
The Treasury evaluates major trading partners based on the following: a goods and services trade surplus with the United States of $15 billion or more; a current account surplus of 3% or more of gross domestic product (GDP); and net purchases of dollars for eight months or longer amounting to 2% or more of GDP.
If all three criteria are met, a partner becomes subject to enhanced analysis, and if only two are met, it is placed on the monitoring list. Korea exceeded the threshold with a $45 billion goods and services trade surplus with the United States, and it also met the second condition with a current account surplus amounting to 6.6% of GDP.
The Treasury judged that Korea faced depreciation pressure on the won despite a large current account surplus. The report said, "It widened from 5.3% of gross domestic product (GDP) in 2024 to 6.6% in 2025," while noting, "The won was under persistent depreciation pressure."
It added, "The increase in overseas stock holdings, including by the National Pension Service, reached $41 billion for the year, up from $8 billion in 2024," and said, "Overseas stock investments by Korea's nonbank financial institutions and retail investors were also a source of depreciation pressure on the won in 2025, with such capital outflows rising from $34 billion in 2024 to $73 billion in 2025, particularly concentrated in the fourth quarter of 2025."
The report also said, "In 2025, Korean individual investors purchased more than $30 billion in overseas stocks, which the Bank of Korea described as a 'distinctive phenomenon.'"
The report assessed that Korea's foreign exchange authorities also eased depreciation pressure on the won through market intervention. It said, "They appeared to focus on easing excessive volatility amid depreciation pressure on the won," and added, "Korean authorities reported net sales of foreign exchange reserves totaling $28 billion in 2025 for market intervention, equivalent to about 1.5% of GDP."
The Treasury also offered an assessment of the opening of the foreign exchange market. The report said, "The relevant Korean authorities are making progress in easing restrictions on foreign investors' participation in Korea's foreign exchange market," adding, "This is likely to help, over the medium term, with market liquidity and the market's function of finding an appropriate exchange rate."