The South Korean won slipped to around 1,470 per dollar, sharply pulling back gains from the previous session as investors assessed recent comments from Bank of Korea Governor Rhee Chang-yong. On Wednesday, he announced in a conference that the currency is trading well below levels justified by economic fundamentals but warned that any rebound could be volatile. Rhee stated that the exchange rate has been driven up by long-standing expectations of further won depreciation, which may take time to reverse. He also pointed out that the heavy overseas investing by institutions like the National Pension Service and retail investors, often without currency hedging, could amplify market volatility if the exchange rate adjusts sharply. Further weighing on sentiment, South Korea’s economy unexpectedly contracted in the final quarter of 2025, marking the steepest decline since late 2022.
