"Doesn’t fit South Korea’s fundamentals"… USD/KRW 'plunges' on a single remark from Bessent [Roundup]

The USD/KRW exchange rate plunged in overnight trading after U.S. Treasury Secretary Scott Bessent said the won’s sharp weakening does not square with South Korea’s strong economic fundamentals.

The Treasury said in a press release on the 14th that Bessent made the remarks during a meeting on the 12th (local time) with Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol, who is visiting the United States.

Commenting on the recent decline in the won, Bessent noted that it "is not consistent with South Korea’s strong economic fundamentals," adding that "excessive volatility in the foreign-exchange market is undesirable." He also reaffirmed that "South Korea’s strong economic performance in key industrial sectors that underpin the U.S. economy makes Korea a core U.S. partner in Asia."

The Treasury said Bessent and Koo discussed ways to fully and faithfully implement the bilateral trade and investment agreement between South Korea and the United States. Bessent emphasized that "implementation of the agreement should proceed smoothly," adding that "the agreement will further deepen the economic partnership between the United States and South Korea and help spur the revival of U.S. industrial capacity."

Koo met with Bessent while visiting the United States to attend the 'Group of Seven (G7) Finance Ministers' Meeting on Critical Minerals' held in Washington, D.C., where the two exchanged views on economic developments in their countries and ways to strengthen economic ties.

After the news broke, the USD/KRW rate as of 2 a.m. closed at 1,464.00 won, down 9.70 won from the previous session’s close in the Seoul FX market. That marked a 13.50 won plunge from the daytime session (9 a.m.–3:30 p.m.) close of 1,477.50 won.

Reporter Choi Man-su