FX.co ★ Korean Won Falls Despite Policy Measures

The South Korean won has depreciated to approximately 1,475 against the dollar, continuing its decline following a short-lived recovery. This downturn persists despite intensified efforts from both authorities and financial institutions to stabilize the currency. Over the weekend, major commercial banks, working alongside foreign-exchange regulators, enacted measures aimed at boosting the domestic supply of dollars and curbing the excessive demand for US currency. Concurrently, the Bank of Korea has introduced temporary incentives by offering interest on mandatory foreign-currency reserves for banks. This initiative is intended to enhance the availability of dollars within the financial system and mitigate exchange rate volatility. Additionally, investor caution has increased due to signals from US officials indicating potential tariffs on foreign memory chipmakers, particularly focusing on South Korea’s Samsung Electronics and SK Hynix, which raises concerns regarding exports.