Former Bank of Korea Governor Lee Chang-yong said increased overseas stock investment contributed to the sharp rise of the dollar-won exchange rate [1].

This shift in investor behavior highlights a growing vulnerability in South Korea's currency stability as retail capital migrates toward foreign markets. The trend reflects a broader psychological shift among young investors that can have systemic macroeconomic consequences.

Lee discussed these dynamics regarding a period in November 2023 when the dollar-won exchange rate approached 1,500 KRW per USD [1]. He said that the surge in the exchange rate was partly due to the rise in overseas stock investments by Korean citizens [1].

During his explanation, Lee described the motivations of younger investors. He said that when he asked young people why they were investing so heavily in overseas markets, they responded that it was “cool” [1].

This comment triggered a wave of public backlash and the creation of internet memes. Critics said that the former governor oversimplified complex economic pressures by attributing a currency slide to the social preferences of youth [1].

Despite the criticism, Lee said that the trend of moving capital out of the domestic market is a problematic factor for the national economy [1]. The outflow of won to purchase foreign assets puts downward pressure on the local currency, making it less valuable against the U.S. dollar [1].

Lee said that the impact of overseas stock investment is a significant element in the current foreign-exchange environment [1].

““Young people... said it was ‘cool’,” said Lee Chang-yong regarding overseas investing.”

The correlation between retail investment trends and currency volatility suggests that South Korea's exchange rate is increasingly sensitive to the sentiment of individual investors. When a significant portion of the population views foreign assets as more attractive or socially desirable, the resulting capital flight can weaken the won, complicating the central bank's efforts to maintain price stability and manage inflation.