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Currencies January 14, 2026

U.S. Treasury Chief Highlights Discrepancies in Won’s Recent Decline Relative to South Korea’s Economic Status

Scott Bessent underscores misalignment between Korean won’s depreciation and South Korea’s robust fundamentals, signaling concerns over exchange rate volatility

By Derek Hwang
U.S. Treasury Chief Highlights Discrepancies in Won’s Recent Decline Relative to South Korea’s Economic Status

U.S. Treasury Secretary Scott Bessent emphasized that the recent depreciation of the South Korean won is inconsistent with the nation’s strong economic fundamentals. In discussions with South Korean Finance Minister Koo Yun-cheol, Bessent expressed concerns over excessive fluctuations in the foreign exchange market and reiterated the importance of stable economic collaboration between the U.S. and South Korea. Following these remarks, the won appreciated notably, reversing prior losses. Both officials also explored enhancements to economic cooperation, with a focus on critical minerals and the smooth implementation of a recently agreed trade deal involving significant South Korean investment in U.S. strategic sectors.

Key Points

  • The South Korean won experienced a significant rebound after depreciating for ten consecutive sessions, influenced by U.S. Treasury Secretary Scott Bessent’s comments.
  • Bessent emphasized that the won’s vulnerability does not align with South Korea’s solid economic performance, reinforcing the value of stable exchange rates.
  • Officials from the U.S. and South Korea discussed enhancing economic cooperation, including critical minerals and the implementation of a substantial trade agreement entailing South Korean investments in U.S. strategic sectors.

In a recent interaction between U.S. Treasury Secretary Scott Bessent and South Korea’s Finance Minister Koo Yun-cheol, attention was drawn to notable currency movements impacting the South Korean won. Secretary Bessent conveyed his perspective that the recent weakening of the won does not accurately reflect South Korea’s underlying economic strengths.

Following his comments, the won rallied sharply, gaining up to 1.15% against the U.S. dollar and reaching 1,462.0 per dollar. This recovery ended a sequence of ten consecutive sessions during which the currency had depreciated to its lowest level since December 24.

Conversations between Bessent and Koo, held on Monday and detailed in a Treasury Department statement, included exchanges on critical minerals and strategies to deepen economic ties. Secretary Bessent stressed that rapid or excessive swings in the foreign exchange market are undesirable, highlighting South Korea’s critical role in supporting key industries vital to the U.S. economy and underscoring its significance as a strategic partner in Asia.

Through a post on the social media platform X, Bessent reiterated his viewpoint that the won’s recent decline was misaligned with South Korea’s robust economic fundamentals. The Statement from the South Korean finance ministry confirmed the meeting, noting that foreign exchange market dynamics were a key topic of discussion.

Earlier on the same day, Finance Minister Koo expressed a commitment to curtail increased volatility within the domestic currency markets. Speaking virtually at a foreign exchange policy forum in Seoul, he outlined intentions to address imbalances between the supply of and demand for U.S. dollars.

In addition to currency concerns, Seoul and Washington concluded a trade arrangement in November aimed at reducing U.S. tariffs on South Korean imports. The deal was linked to a pledged investment of $350 billion by South Korea in strategic U.S. industries, a package that necessitated careful negotiations concerning foreign exchange implications.

Secretary Bessent communicated optimism regarding the smooth and faithful execution of this agreement during his meeting with Minister Koo, as confirmed by Treasury Department remarks.

Risks

  • Continued volatility in the foreign exchange market could disrupt economic stability and affect key industries connected with international trade.
  • Imbalances in the supply and demand for currencies, particularly the U.S. dollar, may lead to pronounced fluctuations in the Korean won, complicating policy responses.
  • Any delay or difficulty in implementing the recently agreed trade deal between South Korea and the U.S. could hamper bilateral economic relations and affect strategic sector investments.

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