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South Korea Plans to Curb Korean Won Surge


January, 03 2018
watermark Economic news

South Korea aims to maximize the potential to raise capital outflows the Korean won as it continues to climbs higher and hopes to improve the trade-reliant national deal with the continuous increase of the currency, according to three public figures on Wednesday as mentioned by Reuters.

The government could foster plans for currency outflows. On the other hand, the spokesperson for the finance ministry refused to give remarks on this matter.

With strong domestic interest rates and stronger probe of the U.S. on the course of the foreign exchange rate, the Republic of Korea is having a hard in curbing the continuous rise of won.

Such schemes of the government would alleviate the pressure on the currency to the policymakers without going for the direct mediation to the forex market in consideration of their relationship with the U.S. Sources did not say any detailed information on the probability of these measures.

South is one of the nations that are being monitored by the U.S. based on foreign exchange policies of major trading partners report in October last year, including China, Japan, and Germany.

A higher currency would lead to higher cost of goods, as well as global consumers, which would have a negative impact on local manufacturers. On Wednesday, the Korean won reached a three-year high at 1,066 won per dollar following an increase of 13 percent in 2017, which is its highest gain in 13 years.

In the past years, the government recommended tax exemptions for ten years particularly on investment gains from funds, which resulted in a shift of 60 percent of assets into foreign stocks. This was implement in February 2016 and ended in December.

For more than five years, the country has been in a surplus until October 2017, according to the facts from the Bank of Korea.


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Foreign exchange trading carries a high risk of losing money due to leverage and may not be suitable for all investors. Before deciding to invest your money, you should carefully consider all the features associated with Forex, as well as your investment objectives, level of experience, and risk tolerance.