FX.co ★ Won Slips on IMF Warning

The South Korean won weakened to approximately 1,420 per dollar on Friday, reversing earlier gains as investor sentiment declined following the International Monetary Fund's cautionary note regarding US tariffs potentially impacting South Korea’s medium to long-term growth outlook. Thomas Helbling, deputy director of the IMF’s Asia Pacific department, indicated that although short-term growth prospects appear favorable due to reduced political uncertainty and supportive policies, increasing tariffs and ongoing uncertainties could gradually undermine export activities and growth momentum. Notably, the recent US-South Korea trade negotiations have shown progress concerning cooperation on shipbuilding projects. Additionally, data from the Bank of Korea highlighted that import prices increased for the third consecutive month in September, spurred by heightened oil prices and a depreciated currency. These figures suggest sustained inflationary pressure from external sources and ongoing weakness of the won, despite resilient export performance, with import prices rising by 0.2% from the previous month, following a 0.3% increase in August.