US Treasury Secretary Scott Bessent Slams Korean Won Depreciation as 'Inconsistent' With Fundamentals
US Treasury Secretary Scott Bessent warns that the Korean won't depreciation is inconsistent with fundamentals, amid Korea's $350B investment pledge. BOK holds rates steady.
The Korean won't freefall just hit a major roadblock. After an 11-session losing streak, the currency finally rebounded as US Treasury Secretary Scott Bessent stepped in with a rare verbal intervention, suggesting the currency's recent slide doesn't reflect the nation's economic reality. The won climbed back to 1,469.7 won on Thursday, retreating from the alarming 1,480 level.
Scott Bessent Korean Won Depreciation Remarks and Verbal Intervention
During a high-stakes meeting in Washington on January 15, 2026, Bessent told South Korean Finance Minister Koo Yun-cheol that the won't weakness was "not consistent" with South Korea's strong fundamentals. He emphasized that "excess volatility" is undesirable, a move widely seen as an attempt to calm markets. This public stance on social media and official channels signals that Washington isn't just watching—it's actively managing the narrative to protect bilateral interests.
The $350 Billion Investment Pivot and Economic Stability
The urgency behind these comments stems from a massive deal finalized in October 2025. Seoul pledged a $350 billion investment package to the US in exchange for lower tariffs. This includes $200 billion in cash installments capped at $20 billion annually. If the won remains too weak, the cost for Korean companies to fulfill these dollar-denominated pledges skyrockets, potentially jeopardizing the very investments the US is counting on.
BOK Holds Rates Steady Amid FX Volatility
Back in Seoul, the Bank of Korea (BOK) kept its benchmark interest rate unchanged for the fifth consecutive meeting. Governor Rhee Chang-yong noted that while 75% of the currency's weakness is driven by external factors like the strong dollar and weak yen, domestic factors—including a surge in overseas securities investments by local residents—are also at play. The BOK's pause reflects a cautious stance on inflation and financial stability.
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