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South Korea Sees Won Strengthening Toward 1,400 as Lee Flags Limits on FX Tools

Officials prioritize communication to deter one-way bets.

Overview

  • President Lee said authorities would already have deployed stabilizing measures if effective tools were available, underscoring policy constraints.
  • He emphasized that exchange rates reflect supply and demand, cautioning against expectations for aggressive or unilateral intervention.
  • Foreign exchange authorities expect the won to firm toward the 1,400 level in the near term, offering guidance after recent volatility.
  • Lee noted the won’s moves have broadly tracked the Japanese yen and argued the won has weakened by less than the yen.
  • The government pledged continued work to stabilize conditions while acknowledging the dominant role of external forces such as US monetary policy and global risk sentiment.