South Korea's major commercial banks are intensifying efforts alongside government foreign exchange authorities to curb the local currency's recent weakness. They are offering incentives for customers to sell U.S. dollars and lowering interest rates on foreign-currency deposits. The won has been hovering near the 1,450 level against the dollar amid ongoing pressures.
South Korea's major commercial banks are ramping up efforts with government foreign exchange authorities to counter the won's recent depreciation, officials said on January 18, 2026, in Seoul. Measures include incentives for customers to convert U.S. dollars to won and reductions in interest rates on foreign-currency deposits. The won has lingered near the critical 1,450 level against the dollar, driven by broad dollar strength, geopolitical risks, and robust overseas equity investments by local investors.
The currency closed at 1,473.6 per dollar on Friday, resuming declines after a one-day rebound that halted a 10-session losing streak. Authorities have directed banks to actively stabilize the foreign exchange market. The Financial Supervisory Service (FSS) will convene with major commercial banks on Monday to press for restraint in promoting U.S. dollar and other foreign currency deposits, according to industry sources.
Last week, Bank of Korea (BOK) officials met with local lenders to assess required reserves on foreign currency deposits and associated interest rates. The central bank introduced a temporary scheme to pay interest on foreign currency required reserves, aiming to enhance domestic dollar liquidity and bolster the won.
A KB Kookmin Bank official stated, "We are holding promotional events for exporters and other customers converting foreign currency into the won and are considering various additional steps to support the government's exchange rate policy."
Woori Bank slashed the dollar interest rate on its foreign currency deposit product for overseas travel to 0.1 percent from 1 percent, seeking to diminish incentives for holding dollar deposits.
These steps follow an earlier this month meeting between the finance ministry and FX marketing managers at major banks, where the ministry urged curbs on aggressive practices like exchange rate discounts on dollar transactions.
