Korean Won Depreciation Eases but FX Volatility Persists, Financial Authorities Say

Kiswahili

In a follow-up to December meetings, top South Korean financial officials on January 8 stated the Korean won's excessive weakness has eased since late last year, though FX market volatility remains high. They pledged continued stabilization amid a rate of 1,449.10 won per dollar.

This January 8, 2026 meeting at Seoul's Hall of Banks—attended by Finance Minister Koo Yun-cheol, Bank of Korea Governor Rhee Chang-yong, Financial Supervisory Service Governor Lee Chan-jin, and Financial Services Commission Vice Chief Kwon Dae-young—built on December actions, including intensified monitoring, eased bank FX rules, and a December 24 verbal intervention against excessive won weakness.

Authorities assessed that depreciation has moderated from recent lows near 1,480 per dollar, with the won strengthening to its highest in nearly two months. However, they noted the exchange rate remains disconnected from fundamentals and the market highly volatile.

The Ministry of Economy and Finance announced prompt follow-up measures, emphasizing firm, consistent policy efforts. Participants reaffirmed readiness for comprehensive stabilization amid global pressures.

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Illustration of South Korean traders and regulators responding to won's record low against USD amid intensified FX monitoring.
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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.

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