Currencies January 14, 2026

US Treasury Official Highlights Misalignment in Korean Won's Recent Decline

Scott Bessent underscores fundamentals-driven value of South Korean currency amid market fluctuations

By Derek Hwang
US Treasury Official Highlights Misalignment in Korean Won's Recent Decline

U.S. Treasury Secretary Scott Bessent addressed the downturn of the Korean won, asserting it deviates from South Korea's solid economic fundamentals. After discussions with South Korean Finance Minister Koo Yun-cheol concerning currency volatility and bilateral economic cooperation, the won reversed a series of losses, reflecting improved investor response.

Key Points

  • U.S. Treasury Secretary Scott Bessent identified a disconnect between the Korean won's recent depreciation and South Korea's sound economic fundamentals.
  • The won rebounded by about 1.15% against the U.S. dollar following ten trading sessions of decline, signaling market sensitivity to dialogue between U.S. and South Korean officials.
  • Discussions between Bessent and Finance Minister Koo covered topics from foreign exchange volatility to critical mineral cooperation, reflecting deepening economic ties.

During a meeting in Washington on January 14, U.S. Treasury Secretary Scott Bessent conveyed concerns regarding the recent slide of the Korean won, emphasizing that this depreciation does not correspond with the robust economic fundamentals of South Korea. His remarks coincided with a notable recovery in the currency's value, which climbed up to 1.15% stronger against the U.S. dollar, reaching 1,462.0 won per dollar, following ten consecutive sessions of declines that had driven the currency to its lowest point since late December.

Secretary Bessent and South Korean Finance Minister Koo Yun-cheol convened earlier in the week, focusing on strategic discussions involving critical mineral resources and initiatives to further solidify economic ties between the United States and South Korea, as detailed by the Treasury Department.

The Treasury Department underlined Bessent's position that excessive fluctuations in foreign exchange markets are undesirable, highlighting South Korea's significant role as a partner to the United States, especially given its strong performance in vital industrial sectors that underpin the American economy. This sentiment was reinforced by Bessent through a message posted on social media platform X.

In tandem, the South Korean finance ministry confirmed the discussions on currency market conditions. Minister Koo, addressing attendees at a virtual forum centered on foreign exchange policy, pledged measures to counter growing volatility in the local currency market and outlined intentions to balance the supply and demand dynamics of the U.S. dollar.

The backdrop to these discussions includes a trade agreement finalized in November between Seoul and Washington, resulting in lowered U.S. tariffs on imports from South Korea. In exchange, South Korea has committed to investing $350 billion in strategic sectors within the United States. This agreement was the product of extended negotiations, particularly concerning the foreign exchange ramifications tied to the investment proposal.

Bessent expressed optimism about the seamless execution of this trade deal, stressing its "full and faithful" implementation during his exchanges with Minister Koo.


Risks

  • Continued volatility in the Korean won could disrupt trade and investment flows between the U.S. and South Korea, impacting sectors reliant on currency stability.
  • Imbalances in dollar supply and demand might pose challenges to South Korea's financial markets, potentially affecting export-driven industries.
  • Any delays or issues in implementing the trade agreement or investment commitments could introduce uncertainty for strategic sectors tied to bilateral economic relations.

More from Currencies

Dollar Extends Post-Nomination Rally as Markets Weigh Fed Direction Feb 2, 2026 Bitcoin Slides Below $80,000 as Ether Drops Sharply; Dollar Firm on Fed Chair Pick Jan 31, 2026 UBS Urges Caution as Dollar’s Slide Meets Political Headwinds and Mixed Economics Jan 30, 2026 Morgan Stanley Sees EUR/USD Reaching 1.23 in Q2 2026 as Dollar Faces Unconventional Pressure Jan 30, 2026 Japan’s Yen Support Limited to Warnings, MoF Records Show Jan 30, 2026