Ministry of Finance and Economy

On July 23 (local time), the U.S. Department of the Treasury released its Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States, assessing the macroeconomic and foreign exchange policies of the 20 largest U.S. trading partners (goods and services) over the period from January to December 2025.         For further details, please refer to the original report published by the U.S. Department of the Treasury: https://home.treasury.gov/system/files/206/July-2026-FX-Report.pdf    

Deputy Minister for International Affairs at the Ministry of Finance and Economy Moon Ji Sung held Investor Relations (IR) sessions on the Korean economy for major global investors in London on July 20 and in Singapore on July 22, encouraging global financial institutions to expand their investment in and engagement with the Korean market.     [ 1. IR session on the Korean economy: Promoting Korea’s Economic Growth Strategy and Investment Attractiveness ]   The IR sessions were held in a roundtable format with a select group of key investors and brought together leading global asset managers – including BlackRock, the world’s largest asset manager, Amundi, and Schroders – as well as major sovereign wealth funds and global investment banks (IBs), including Goldman Sachs, HSBC, and J.P. Morgan.   During the sessions, Deputy Minister Moon highlighted Korea’s solid economic growth momentum and the government’s economic growth strategy for the second half of the year. In particular, he noted that Korea’s real gross domestic product (GDP) is projected to grow by 3.0 percent this year – the highest growth rate in five years – while nominal GDP is expected to increase by 12.3 percent, marking the strongest growth in nearly three decades. He emphasized that Korea’s economic growth continues to be underpinned by its emergence as the world’s fifth-largest exporter, a record-high current account surplus, and strong investment in semiconductor facilities and equipment.   He then introduced the government’s “3·4·5 Vision” outlined in its economic growth strategy for the second half of the year: boosting potential growth to 3 percent, advancing Korea to become the world’s fourth-largest exporter, and raising gross national income (GNI) per capita to USD 50,000. He also outlined the government’s key policy priorities for achieving these goals, including maintaining macroeconomic stability, strengthening supply chain resilience and energy security, expanding new growth engines, promoting balanced regional development, and advancing structural reforms.   During the Q&A session, investors showed strong interest in Korea’s favorable growth outlook, how the government plans to use the increased tax revenue resulting from the upturn in the semiconductor industry, the sustainability of the semiconductor upcycle, measures to ease stock market volatility, and the government’s won internalization plan.   Responding to a question on recent movements in the Korean won, Deputy Minister Moon said that recent changes in FX supply and demand – including increased spot and forward sales of foreign currency by exporters in the shipbuilding and semiconductor industries – are likely to prove more than temporary and could continue going forward. He added that the Korean won still remains undervalued relative to Korea’s economic fundamentals, suggesting there is further room for appreciation.   Regarding geopolitical uncertainties in the Middle East and the government’s policy response, Deputy Minister Moon said that, given Korea’s heavy dependence on energy imports, the government would strengthen supply chain resilience and energy security by expanding domestic production and strategic reserves of critical items, while also promoting investment in overseas production facilities and securing long-term supply contracts.     [ 2. IR Session on the FX Market: Presenting the Won Internationalization Roadmap and Consulting with Market Participants ]   Deputy Minister Moon held FX market IR sessions for London-based Registered Foreign Institution (RFI)* and member firms of the Global Foreign Exchange Division (GFXD)** of the Global Financial Markets Association (GFMA) in Singapore.   * Registered Foreign Institution (RFI): A foreign financial institution registered to participate directly in Korea’s FX market. ** Global Foreign Exchange Division(GFXD): An industry forum on the FX market under the GFMA, comprising major global banks.   During the sessions, Deputy Minister Moon provided a detailed overview of the Korean government’s ongoing FX market reforms, including improvements to the RFI framework. He also elaborated on the recently announced Won Internationalization Roadmap, which aims to develop the Korean won into a currency that can be more freely held, traded, and obtained outside Korea.   Participants agreed on the need for and direction of won internationalization and expressed support for the government’s plans. They also showed strong interest in how the offshore won settlement system would operate and how won liquidity would be provided during overnight trading hours.   Deputy Minister Moon explained that the government will build the necessary infrastructure to enable foreign investors to conveniently trade, hold, and settle Korean won through their existing banking relationships overseas. He added that the government will pursue institutional reforms to foster private sector-led liquidity provision and broaden market participation.     [ 3. Global Key Investor Consultative Group: Establishing a Standing Platform for Investor Dialogue and Feedback]   Last but not least, Deputy Minister Moon announced plans to officially launch the Global Key Investor Consultative Group, bringing together global investors and relevant domestic institutions, following the IR sessions on the Korean economy and other outreach efforts. The consultative group will serve as a standing platform for dialogue and feedback, through which the government will directly brief overseas investors on reforms to the FX and capital markets and review and address issues raised during the investment process.   Deputy Minister Moon said that the government would continue to regularly engage with overseas investors and listen closely to the challenges they face in their day-to-day transactions. He added that the government would carefully review the feedback received during the visit in consultation with the relevant authorities, while working to establish a sustained two-way communication framework with investors. Please refer to the attached files.

On July 21, Second Vice Minister of Finance and Economy Huh Chang held a meeting with major Korean exporters – including Samsung Electronics, SK hynix, Hyundai Motor and Kia, HD Korea Shipbuilding & Offshore Engineering (HD KSOE), Hanwha Ocean, and Samsung Heavy Industries – at the Government Complex Seoul. During the meeting, participants reviewed recent developments in foreign exchange (FX) transactions and discussed public-private cooperation measures to help mitigate volatility in the FX market.   Vice Minister Huh noted that the supply-demand imbalance in the FX market has eased somewhat in recent weeks. He observed that the KRW/USD exchange rate, which had climbed to the KRW 1,550 level immediately prior to the government’s meeting with exporters in June, has declined rapidly to the upper KRW 1,400 range, supported by increased FX sales by exporters, forward sales by shipbuilders, and inflows associated with SK hynix’s ADR issuance. He also noted that dollar-buying by offshore investors, which had previously expanded amid expectations of continued weakness in the Korean won, has moderated somewhat.   Vice Minister Huh further emphasized that foreign currency supply and demand conditions are expected to improve further in the second half of the year, underpinned by Korea’s solid economic fundamentals, including continued strength in the semiconductor sector. (The government has revised up its forecast for Korea’s current account surplus in 2026 from USD 135 billion to USD 290 billion, well above the previous record high of USD 123.1 billion posted in 2025)   Vice Minister Huh highlighted that, despite persistent external uncertainties, including the ongoing conflict in the Middle East, the government remains firmly committed to swiftly anchoring market sentiment as they continue to stabilize and has ample policy tools available to maintain market stability. He also called on major exporters, in light of the changing FX market conditions, to play an active role by increasing the conversion of export proceeds and foreign currency deposits into Korean won and facilitating greater inflows of funds held overseas.   The participating companies shared the view that a stable FX market serves as the foundation for reducing uncertainty in the overall business environment and fostering a stable basis for investment and business operations. They also agreed to take a more proactive and responsible role in supporting the government’s efforts to stabilize FX supply and demand, so that the recent improvement in FX supply and demand can be firmly established as a sustained trend of stability in the FX market.   Please refer to the attached files.