A rapid won rally is drawing scrutiny at South Korea’s central bank, where board member Hwang Kunil told Reuters its pace was somewhat faster than expected and said he was monitoring volatility. Hwang added, “We are watching volatility closely.”
Reuters put the won’s gain at about 13% against the U.S. dollar in the third quarter of 2026, its strongest quarterly rise since the fourth quarter of 1998. Hwang pointed to dollar flows linked to global AI expansion and demand for specialized memory chips from SK Hynix and Samsung Electronics as contributors to the currency’s advance, Reuters reported.
The Bank of Korea’s Monetary Policy Board kept its base rate at 3.00% on Oct. 22, with all seven members supporting the decision. The bank said improved foreign-exchange supply and demand, backed by a large current-account surplus, helped bring the won-dollar rate down even as the U.S. dollar strengthened. The board said it would consider inflation, economic conditions and financial stability when judging the timing and pace of any further rate increases. EconoTimes previously covered the won’s strongest 2026 close against the dollar.
The Bank of Korea reported September 2026 consumer-price inflation of 2.9%, with core inflation at 2.8%, against its 2% medium-term target. It expects inflation to remain above target for an extended period and said its 2027 forecast would exceed its August estimate of 2.3%. Hwang gave a separate outlook to Reuters: He expects inflation to start converging on the target in the latter part of the first half of 2027, then stabilize near 2% at year-end or early 2028.
Hwang told Reuters the export boom’s gains were uneven, pointing to a slow recovery in private consumption and elevated delinquency rates at small and medium-sized companies. The board’s next scheduled meeting is Nov. 26.
