Forex
Home›Forex›Major Pairs›South Korea’s won steadies after BoK delivers another…
South Korea’s won steadies after BoK delivers another rate hike
After a second 25 basis point move by the Bank of Korea, USD/KRW fell from 1,385 to about 1,378 and is expected to trade in a 1,360 to 1,400 band near term.
Commerzbank currency strategist Charlie Lay said the Bank of Korea delivered its second consecutive 25 basis point rate hike, taking its policy rate to 3.0% while maintaining a tightening bias that is supportive for the South Korean won.
Lay noted the BoK signaled a potential near-term pause, but that another hike to 3.25% could be on the table if growth and core inflation remain firm.
Following the decision, USD/KRW reportedly dropped from about 1,385 to around 1,378. The analyst expects the pair to consolidate in the 1,360 to 1,400 range, also citing factors such as South Korea’s large external surplus and reduced financial-account outflows.
Lay added that although the won has gained sharply, with KRW up about 12% versus the dollar since end-June, additional appreciation may be more gradual. He also pointed to BoK expectations that the South Korea current-account surplus could reach a record USD 450 billion in 2026, supported by exceptionally strong semiconductor exports.