The South Korean won appreciated to around 1,470 per dollar, hovering near its strongest level since March, supported by easing oil prices and shifting domestic policy expectations. Reports that the United States and Iran are considering further negotiations bolstered hopes that diplomatic channels will remain open and helped reduce concerns over potential Middle East supply disruptions, putting downward pressure on crude prices. This, in turn, helped alleviate imported inflation in South Korea.
Recent data showed import prices jumping 16.1% month-on-month in March, the steepest increase in nearly three decades, driven largely by higher oil prices and a weaker won. The figures underscored the scale of external cost pressures and highlighted South Korea’s acute vulnerability to global energy shocks, given its heavy dependence on imported crude.
Bank of Korea governor nominee Shin Hyun-song indicated that persistent inflationary pressures may call for a policy response and cautioned against excessive depreciation of the won, reinforcing expectations of more vigilant foreign exchange oversight.
