Washington: The United States has maintained South Korea on its list of countries being monitored for foreign exchange policies, as indicated by a report from the Treasury Department. This decision comes in the context of ongoing trade discussions between Seoul and Washington, where currency policy has been a significant topic.
According to Yonhap News Agency, the Treasury Department released its latest "Report to Congress on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States," which includes South Korea on the "monitoring list." South Korea was re-added to the list in November of the previous year, after having been excluded in November 2023 for the first time since April 2016.
The current monitoring list includes South Korea, China, Japan, Taiwan, Singapore, Vietnam, Germany, Ireland, and Switzerland, with only Ireland and Switzerland being newly added since the November 2024 report. The report attributes South Korea's inclusion to its significant bilateral trade surplus and material current account surplus.
The Treasury Department's report highlighted that South Korea's current account surplus increased substantially during the assessment period, rising to 5.3 percent in 2024 from 1.8 percent the previous year, primarily due to the goods trade. It also advised South Korea to limit its currency interventions to exceptional situations involving disorderly foreign exchange market conditions.
The department emphasized its commitment to using "all available tools" to implement robust countermeasures against "unfair" currency practices. The report mentioned President Trump's dedication to pursuing economic and trade policies aimed at revitalizing the American economy, eliminating detrimental trade deficits, and countering unfair trade practices, including combating unwarranted interventions in currency markets.
Countries are placed on the monitoring list when they meet two of the three criteria outlined in the U.S. Trade Facilitation and Trade Enforcement Act of 2015. These criteria include having a bilateral trade surplus with the U.S. of at least $15 billion, a material current account surplus of at least 3 percent of GDP, and persistent, one-sided intervention in the foreign currency market for more than eight months in a year, with net purchases totaling at least 2 percent of an economy's GDP over a 12-month period.