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3h ago

South Korean Won Tests 1,480 as BOK Cites Resident Outflows

A central bank official linked the currency’s weakness to a surge in overseas investments by residents despite a large current-account surplus.

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The closing won-dollar exchange rate is displayed on a screen inside the dealing room of Hana Bank in central Seoul on Jan. 12, 2026. (Yonhap)
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An electronic signboard at Hana Bank in central Seoul shows the won-dollar exchange rate on Jan. 14, 2026. (Yonhap)

Overview

  • The won traded around 1,470–1,480 per U.S. dollar this week, its weakest range since December 23 and near the April 2025 trough.
  • The Bank of Korea reported a net US$19.6 billion outflow in January–October 2025, driven by residents who bought US$117.1 billion of foreign securities versus US$71 billion a year earlier.
  • Officials also cited a widening growth-rate gap with the United States and differences in expected returns between domestic and overseas markets as added pressure on the currency.
  • External factors included a weaker Japanese yen, while foreign investors sold a net 276.77 billion won of Korean shares on Jan. 13 even as the KOSPI set a record.
  • A KOFIA survey found 28% of bond experts expect further depreciation next month and 96% expect the policy rate to stay at 2.5% at this week’s meeting.