15.01.202603:31:13UTC+00South Korean Won Retreats as BOK Holds Rates

The South Korean won has depreciated to approximately 1,471 per dollar, overturning the gains it made in the previous trading session. This shift comes as the Bank of Korea opted to keep its benchmark interest rate steady. This decision highlights the challenges posed by concerns over a weak won and exchange-rate volatility, which are constraining the potential for further policy easing, despite the economy's uneven growth trajectory. Although this stance has helped to moderate sharper declines, it has not resulted in a sustained recovery due to ongoing foreign exchange pressures linked to the global strength of the dollar and regional currency trends. The won did receive brief support from an unusual statement by US Treasury Secretary Scott Bessent, who noted that the recent decline was excessive and misaligned with South Korea’s economic fundamentals. Meanwhile, South Korean authorities have implemented measures to stabilize the foreign exchange market, such as increased monitoring of cross-border financial flows and a crackdown on illegal currency transactions, signaling their commitment to reducing excessive volatility and bolstering market confidence.