22.01.202603:17:10UTC+00Korean Won Slides as BOK Signals Risk

The South Korean won experienced a downturn, falling to approximately 1,470 per dollar, effectively erasing gains from the earlier session. This drop came as investors evaluated recent remarks made by Rhee Chang-yong, the Governor of the Bank of Korea. Speaking at a conference on Wednesday, Governor Rhee noted that the current trading level of the currency is significantly lower than what economic fundamentals would justify, although he cautioned that any recovery could be unpredictable. He attributed the currency's elevated exchange rate to longstanding expectations regarding further depreciation of the won, suggesting that this sentiment might take time to change. Additionally, Governor Rhee highlighted that extensive overseas investments by entities such as the National Pension Service, along with retail investors’ tendency to invest without currency hedging, could exacerbate market volatility if there is a sudden adjustment in exchange rates. Further impacting investor sentiment, it was reported that South Korea’s economy unexpectedly contracted during the last quarter of 2025, representing the largest decrease since the end of 2022.