South Korea's Finance Minister: Current Exchange Rate Level Is "Excessive" Relative to Fundamentals
Taylor Wilson
Finance Minister Choo Kyung-ho called the dollar-won rate at the mid-1,500s "excessive" relative to fundamentals, blaming foreign investors' profit-taking — an estimated ₩140 trillion in stock sales — as the main drag on the won.
Why did the finance minister speak out now?
President Lee Jae-myung directly pressed Choo at a cabinet meeting: exports are strong and the current-account surplus is at a record — why is the won still falling?
Choo responded publicly, labelling the dollar-won rate in the mid-1,500s as "excessive."
This means → Seoul's tolerance for won weakness is narrowing, and the intensity of verbal guidance is stepping up.
Why is the won diverging from fundamentals?
Choo pinpointed foreign profit-taking as the main cause: during Korea's sharp equity rally, overseas investors sold an estimated ₩140 trillion (≈$91.1 billion) in stocks to rebalance portfolios.
In plain terms = foreign funds cashed in Korean equity gains and converted back to dollars en masse, flooding the market with won and pushing the currency down.
Choo did not specify the time frame for that ₩140 trillion figure, which limits its usefulness as a benchmark.
What does the government plan to do?
Choo said regulators will take steps to guard against sudden market volatility, but made no mention of direct currency intervention.
This means → the current playbook leans on verbal guidance plus regulatory tools, not spending reserves to buy won.
This reflects a dilemma: fundamentals are solid, yet capital-flow-driven currency misalignment may not yield to jawboning alone — whether expectations can be stabilised without harder action remains an open question.
Content is for reference only, not financial advice.