Why the Korean Won Is Thoroughly Ignored Even With Semiconductor Exports Ranking #1 Globally | Hong Seonae, Byeon Jeonggyu, Daiwa Securities Korea Division Head [Yeouido Insight]

Summary

Byeon Jeonggyu, FICC head at Daiwa Securities Korea, explains that the recent surge in USD/KRW above 1,500 is primarily due to structural demand-supply imbalances rather than speculative attacks. He forecasts a trading band of 1,450–1,600 with upside bias and advises dollar buyers to average their purchases. The discussion also covers the role of interest rate differentials, capital outflows, and policy options for internationalizing the won.

• USD/KRW briefly surpassed 1,560 before stabilizing near 1,520.
• Byeon identifies the root cause as weak demand for the won relative to the dollar.
• Korean exporters receive dollars, not won, reducing won demand.
• Capital outflows via overseas investment and travel further pressure the won.
• Interest rate differentials between Korea and the US remain a key factor.
• Byeon expects USD/KRW to trade in a 1,450–1,600 range with upside risk.
• He recommends a gradual dollar-buying strategy for those with actual dollar needs.
• WGBI inclusion has provided some support to Korean financial markets.