Bank of Korea Official Warns of Rapid Won Appreciation

Hwang Kunil, a voting board member of the Bank of Korea, warned that the South Korean won has appreciated against the U.S. dollar faster than expected. The currency rose approximately 13% in the third quarter, marking the sharpest increase since 1998. This surge was driven by dollar inflows resulting from global AI chip demand benefiting Samsung Electronics and SK Hynix.

While the Bank of Korea maintained interest rates at 3.00% this month, Hwang highlighted a divide in economic growth. He noted that while exports remain the backbone of the economic structure, small and medium-sized companies are struggling with weak domestic demand and high delinquency rates.

Hwang projected that headline consumer price inflation will approach the 2.0% target by the first half of 2027, with full stabilization expected by late 2027 or early 2028. He also suggested the annual current-account surplus could be revised upward to nearly $500 billion.