South Korea and U.S. Discuss Forex and Tariffs as Won Surges

South Korea’s Deputy Finance Minister Choi Ji-young met with Robert Kaproth, U.S. Treasury Assistant Secretary for International Finance, on May 5 in Milan during the 58th ADB Annual Meeting. The discussion focused on the dollar/won exchange rate and broader economic coordination, a South Korean government official confirmed.

This meeting follows an April 25 agreement between the U.S. and South Korea to collaborate on a trade package addressing tariffs, economic security, foreign exchange policies, and investment. The talks aim to resolve key trade issues ahead of the expiration of a reciprocal tariff pause scheduled for July.

The won rallied 1.4% against the U.S. dollar on Wednesday, reaching 1,398.40 as of 0830 GMT. This marks a significant move as the currency breached the key psychological threshold of 1,400 per dollar. Market participants suggest that news of the forex discussions may have contributed to the won’s strength, though more analysis is needed to confirm capital flow trends. A local forex dealer, speaking anonymously, noted the sharp gains in the afternoon session as particularly noteworthy.

Last year, the Korean won was Asia's worst-performing emerging market currency, plunging over 14% against the dollar amid global tightening and economic uncertainty.

In related developments, U.S. Trade Representative Jamieson Greer is scheduled to meet with South Korea’s Trade Minister Ahn Duk-geun on Friday during the APEC meeting in Seoul. The two will address a wide range of trade issues, underscoring ongoing efforts to deepen economic cooperation.

These diplomatic engagements signal a strategic push by both nations to stabilize trade relations and manage currency volatility, key concerns amid shifting global financial conditions. The market will closely monitor the outcomes of these meetings in the coming weeks.