Bank of Korea board member says won moves faster than expected
TLT•Bank of Korea board member Hwang Kunil said the won’s recent gains have been faster than expected and that the central bank is closely monitoring volatility. He said the current-account surplus could reach nearly $500 billion this year, up from the bank’s August forecast of $450 billion.
1. Won volatility monitored
Hwang said the pace of the won’s recent gains was somewhat faster than expected and that the Bank of Korea was watching volatility closely. He said downward pressure on the exchange rate remained valid after accounting for the current-account surplus and foreign investment rebalancing. The won gained about 13% against the dollar in the third quarter, its sharpest rise since the fourth quarter of 1998.
2. Growth and inflation outlook
Hwang expects export momentum to continue and said the current-account surplus could reach nearly $500 billion this year, compared with the Bank of Korea’s August forecast of $450 billion. He said a $50 billion shortfall would be a blow, but that the boom was likely to last somewhat longer. He expects inflation to approach the central bank’s 2% target toward the end of the first half of 2027 and to stabilize at the target by the end of next year or early 2028.
3. Uneven domestic recovery
Hwang said the benefits of export growth had not been distributed evenly, with private consumption recovering more slowly and smaller companies facing elevated delinquency rates and weak domestic demand. The Bank of Korea held its policy rate at 3.00% this month after back-to-back increases in July and August, while leaving further tightening on the table.
