The US Treasury Department announced on Thursday (local time) that it is keeping South Korea on its foreign exchange monitoring list. The report assesses that the recent weakness of the Korean won does not align with the country's strong economic fundamentals and views it as excessive depreciation. The South Korean government plans to maintain close communication with the US to ensure market stability.
The US Treasury Department stated in its semiannual report to Congress, released on Thursday (local time), that it is maintaining South Korea on its foreign exchange monitoring list. The report, covering the period through June 2025, concluded that no major trading partner met the criteria for currency manipulation. South Korea remains listed alongside Japan, Taiwan, and others due to meeting at least two of three criteria: a bilateral trade surplus with the US of at least $15 billion, a material current account surplus of at least 3% of GDP, or persistent one-sided intervention in forex markets.
South Korea was removed from the list in November 2023 for the first time since April 2016 but was added back in November 2024 ahead of the Donald Trump administration's inauguration. The report noted that "the won depreciated further in late 2025, which was not in line with Korea's strong economic fundamentals." South Korea's Ministry of Economy and Finance interpreted this as Washington's recognition of the won's "excessive" and one-sided weakening since the second half of 2025 as inappropriate.
This aligns with earlier comments from US Treasury Secretary Scott Bessent, who described the won's recent weakness as inconsistent with South Korea's strong fundamentals and "undesirable." A senior presidential official at Cheong Wa Dae said the Treasury reaffirmed that the won's weakness does not reflect economic fundamentals, adding that the designation was made in a "somewhat mechanical manner" based on criteria. The official noted that financial authorities are in close communication with the Treasury and will continue consultations.
South Korea's government plans to expand mutual understanding on forex markets and cooperate with the US to ensure stability. The monitoring list, under the 2015 Trade Facilitation and Trade Enforcement Act, also includes China, Germany, Switzerland, and seven others.
