South Korean Finance Ministry Senior Forex Official Moon Jisung Says South Korea and the U.S. Agree to Closely Cooperate to Address Weakening Won
Moon Jisung, a senior official responsible for foreign exchange policy in South Korea, stated that South Korea and the United States have agreed to maintain close cooperation to address the issue of the weakening won.
The two sides met over the weekend in Washington, where Moon Jisung expressed that the recent depreciation of the won lacks support from economic fundamentals and has been excessive. He emphasized the need for enhanced communication and collaboration to stabilize the exchange rate.
In market mechanisms, short sellers of the won are accelerating their position closures or hedging, with funds flowing from won assets to the dollar or more stable emerging market currencies. Official agencies that successfully coordinate interventions benefit, while companies and importers under pressure from the continuously strained exchange rate face challenges.
Source: Public Information
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Moon Jisung, the Deputy Minister of International Affairs at the South Korean Finance Ministry, has previously represented South Korea in discussions with the U.S. regarding exchange rates and investment issues. Amid pressures from capital outflows despite strong semiconductor exports, he is promoting bilateral communication mechanisms to maintain financial stability.
In terms of capital pathways, the South Korean government is leveraging diplomatic and monetary policy resources through the Finance Ministry to seek understanding and cooperation from the U.S. The motivation is to avoid excessive depreciation that could harm import costs and financial confidence, while also stabilizing the market by combining favorable fundamentals in sectors like semiconductors and continuing to coordinate the pace of investment in the U.S. to reduce exchange rate volatility.
Similar cases include joint statements by South Korea and the U.S. to stabilize the market during significant fluctuations of the won in 2022-2023, as well as central bank interventions in several Asian countries during periods of a strong dollar. Japan is currently in a phase of exchange rate coordination between the won and regional currencies under high-interest rate differentiation.
Essentially, this reflects regulatory changes: the South Korea-U.S. bilateral cooperation mechanism alleviates unilateral pressure on the exchange rate through high-level meetings and communication channels, promoting a reallocation of capital from panic-driven outflows to orderly configurations supported by fundamentals, and accelerating coordinated adjustments in emerging market monetary policies within the global dollar cycle.
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Exchange rates are not isolated; they are switches for capital flows under the coordination of major powers. When fundamentals are strong, excessive depreciation often begins with diplomatic communication for intervention leverage. In a window of currency weakness, cooperation reshapes pricing power more sustainably than unilateral interventions.