President Lee Jae‑myung said the won‑dollar exchange rate breaking the 1,500-won level is driven by foreign investors selling Korean stocks [1].
The president's comments come as South Korea faces significant currency volatility. Because the won's value directly affects import costs and national inflation, the breach of the 1,500-won threshold represents a critical point of economic pressure for the administration.
Speaking during a cabinet meeting at the Blue House, Lee identified a specific mechanism driving the currency's decline. He said that the demand for dollars has increased because foreign investors are selling their equity holdings in Korea and converting those proceeds into U.S. dollars [1]. This cycle of selling stocks to exit the market puts downward pressure on the won while increasing the demand for the dollar.
Lee said that the current trend of the rising exchange rate will stop once stock prices stabilize [1]. He believes that a steadying equity market will reduce the incentive for foreign investors to liquidate their positions, thereby easing the demand for dollar conversions.
During the meeting, Lee noted the severity of the situation, saying, "(The won-dollar exchange rate) has exceeded 1,500 won. I think one of the main reasons is that there is quite a bit of demand for foreigners to sell stocks and convert them into dollars and leave" [1].
The president did not specify an immediate timeline for when the stock market would reach this stability, but he linked the recovery of the currency directly to the performance of the domestic stock exchange. The administration's focus remains on the intersection of equity market confidence and currency stability to prevent further economic slippage.
“The won‑dollar exchange rate breaking the 1,500-won level is driven by foreign investors selling Korean stocks.”
The president's analysis suggests that the currency crisis is a symptom of a broader lack of confidence in the Korean equity market rather than a purely monetary or trade-driven issue. By attributing the 1,500-won breach to foreign capital flight, the administration is signaling that stabilizing the stock market is the primary lever for correcting the exchange rate, potentially prioritizing investor confidence over direct currency intervention.
