The U.S. Treasury Department kept South Korea on its foreign-exchange monitoring list in a semi-annual report released Thursday [1], [2].
This designation signals that Washington is closely scrutinizing South Korea's currency practices to ensure they do not unfairly manipulate exchange rates to gain a trade advantage. While the U.S. does not currently label South Korea a currency manipulator, the monitoring status serves as a warning that the country's financial policies are under intense observation.
The Treasury determined that the South Korean won has faced sustained depreciation pressure [3]. According to the report, this trend is inconsistent with the country's strong economic fundamentals and trade surplus [3], [4]. Because South Korea met two of the three U.S. criteria for enhanced monitoring, it remains on the list for the fourth consecutive time [5].
In total, 10 economies are currently on the monitoring list [1]. Despite the inclusion of South Korea, the Treasury said that no major U.S. trading partner manipulated its currency to gain an unfair trade advantage in 2026 [2].
South Korea has a fluctuating history with this list. The country was temporarily excluded in November 2023, which marked its first removal from the monitoring list since 2016 [1].
Responding to the decision, a spokesperson for the South Korean Ministry of Finance said, "The government will maintain close communication with the United States over Washington's recent decision to keep South Korea on the list" [4].
The report specifically noted that the weak won is "inconsistent with fundamentals" [5]. This assessment suggests that the currency's value is lower than what would be expected based on the nation's actual economic performance.
“No major U.S. trading partner manipulated its currency to gain an unfair trade advantage in 2026.”
The Treasury's decision reflects a tension between South Korea's strong trade performance and the declining value of its currency. By keeping Seoul on the monitoring list, the U.S. is signaling that it views the won's depreciation not as a natural market fluctuation, but as a potential policy misalignment that could distort trade balances between the two allies.
