The South Korean won hovered around 1,539 per dollar, extending its slide to the weakest level in more than two weeks after MSCI decided to keep South Korea in its emerging-market category. MSCI pointed to ongoing foreign-exchange market accessibility issues—most notably limited offshore won convertibility and insufficient liquidity during extended trading hours—as key reasons for delaying South Korea’s upgrade to developed-market status.
At the same time, the US dollar held relatively firm as investors continued to reassess the outlook for US monetary policy. Domestically, the Bank of Korea reiterated a hawkish tone, indicating that higher interest rates may be warranted at an appropriate time, with rising housing prices, mounting household debt, and increased leveraged investments heightening risks to financial stability.
Losses in the won were partly contained by a pullback in oil prices, as easing concerns over potential disruptions to energy supplies through the Strait of Hormuz offered some relief to South Korea’s energy-importing economy.
