The president personally called for stabilizing the exchange rate! Lee Jae-myung: The Korean won is expected to stabilize and rise to the 1400 level within two months.

South Korean President Lee Jae-myung said that the long-standing pressure on the South Korean won exchange rate is expected to stabilize and rise within the next two months, with the exchange rate against the US dollar possibly stabilizing around 1400 won. At a press conference on Wednesday, Lee Jae-myung pointed out that the recent weakening of the won is "not unique to South Korea," with the Japanese yen experiencing more significant depreciation pressure. He emphasized that "the government will continue to study all feasible measures to promote the return of the exchange rate to a stable range." Boosted by this statement, the won exchange rate rose during trading on Wednesday. However, since the second half of 2025, the won has depreciated by over 8% against the US dollar. Despite multiple rounds of regulatory measures and market interventions by the South Korean government, the depreciation of the won could not be halted, and the exchange rate once approached its lowest point since the global financial crisis. Lee Jae-myung admitted that solely relying on domestic policies of South Korea, it is "difficult to fundamentally reverse the depreciation trend of the won." He further added, "South Korea's export volume has hit a historic high of $700 billion, the trade balance remains surplus, the economic growth momentum continues to recover, but the exchange rate still lingers in the low range of last year." Last year, the won exchange rate once hit its lowest level in 17 years. Previously, South Korea had promised under a trade agreement framework to accumulate $350 billion in investments in the US in the future, sparking concerns about South Korea's capital expenditure financing capability. Given the current pressure on the won exchange rate, the South Korean government has decided to temporarily postpone fulfilling its investment commitment of $20 billion in the US for this year, which is part of the aforementioned investment plan in the US. The strong preference of South Korean individual investors for US stocks has become a key factor dragging down the won exchange rate. Data from South Korean securities depositary institutions show that this month, individual investors in South Korea held a record high of nearly $172 billion in US stock assets. Lee Jae-myung stated, "Compared to the yen, the depreciation of the won has been relatively moderate." He estimated that if the depreciation of the won matches that of the yen, the current exchange rate against the US dollar could reach around 1600 won, indicating that the won's performance is relatively strong. He explicitly predicted, "In the next one to two months, the exchange rate of the US dollar against the won is expected to fall back to around 1400." Following his statement, the won exchange rate rose in the Seoul foreign exchange market, with the exchange rate against the US dollar rising by 0.7% at one point to reach 1468.00 won. Kookmin Bank economist Minhyeok Lee analyzed that the core drive of the won's rise this time is the policy signal released by Lee Jae-myung, which demonstrates the government's firm determination to stabilize the market. He also pointed out that for the current president to make such strong comments on foreign exchange issues is "rare." Currently, geopolitical tensions continue to escalate - US President Trump is pushing for measures related to Greenland, along with increasing rifts between the US and Europe, leading to a resurgence of global risk aversion. Minhyeok Lee stated, "If the trend of the weakening US dollar caused by Greenland-related developments continues, the room for the won's rebound will further expand." At the press conference on Wednesday, Lee Jae-myung also sent a positive signal to the stock market, saying that the South Korean benchmark stock index is expected to reach the 5000-point target promised during the election period. He emphasized, "Compared to Taiwan and other emerging markets, the valuation of the South Korean stock market is significantly undervalued."