US keeps S. Korea on its 'monitoring list' for FX policy

Korea Herald

06-06-2025

The United States has kept South Korea on its list of countries to monitor for their foreign exchange policies, a Treasury Department report showed Thursday, as currency policy has been a topic in trade talks between Seoul and Washington.
The department released the updated "monitoring list" in the semiannual "Report to Congress on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States." South Korea was put back on the list in November last year after it was excluded in November 2023 for the first time since April 2016.
The latest monitoring list comprises South Korea, China, Japan, Taiwan, Singapore, Vietnam, Germany, Ireland and Switzerland. All except Ireland and Switzerland were on the list in the November 2024 report.
The report ascribed South Korea's inclusion on the list to its bilateral trade surplus and material current account surplus.
It pointed out that Korea's current account surplus increased considerably during the report period, reaching 5.3 percent in 2024, up from 1.8 percent a year prior -- a rise driven by the goods trade.
It also said that Korea should continue to limit currency intervention to exceptional circumstances involving disorderly foreign exchange market conditions.
The department vowed to use "all available tools" to implement strong countermeasures against "unfair" currency practices.
"President Trump is committed to pursuing economic and trade policies that will spur an American revitalization marked by strong economic growth, the elimination of destructive trade deficits, and countering unfair trade practices," the report read.
"This includes combating unfair currency practices that facilitate competitive advantage, such as unwarranted intervention in currency markets."
US trading partners are put on the list when they meet two of the three criteria set by the US Trade Facilitation and Trade Enforcement Act of 2015, also known as the 2015 Act.
The criteria are a bilateral trade surplus with the US of at least US$15 billion, a material current account surplus of at least 3 percent of gross domestic product and persistent, one-sided intervention in the foreign currency market for at least eight months during a year and with net purchases totaling at least 2 percent of an economy's GDP over a 12-month period. (Yonhap)