$20 Billion US Investment 'Unlikely' to Pressure Won: BOK Governor

Bank of Korea Governor Shin Hyun-song said that South Korea's planned annual investment of up to $20 billion in the US is unlikely to put pressure on the won. Speaking at the Jackson Hole Economic Policy Symposium, Shin attributed this resilience to the country's foreign exchange reserves and recent strengthening of the won against the dollar.

The $20 billion annual investment is part of a larger $350 billion investment framework with Washington, agreed upon in exchange for lower tariffs. However, concerns had emerged that the increased demand for dollars could weaken the won further. Shin dismissed these concerns, pointing to the won's recent gains and its ability to withstand external shocks.

In response to a question about whether the BOK would mechanically follow Federal Reserve rate moves, Shin emphasized that monetary policy decisions are not made based on interest-rate gaps between countries. While acknowledging that a continued rise in US interest rates could change the environment for monetary policy, he stated that the BOK would reassess the situation and make adjustments accordingly.