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2mo ago

Won Falls to 17-Year Low as Heavy Foreign Selling Sends Markets Tumbling

Renewed Middle East tensions and large offshore stock outflows have driven dollar demand, prompting Seoul and the Bank of Korea to pledge immediate steps to curb one-sided moves.

A clerk sorts US$100 banknotes at the headquarters of Hana Bank in Seoul on May 7, 2026. The country's foreign reserves gained $4.22 billion from a month earlier to $427.88 billion as of end-April, rebounding despite efforts by authorities to manage exchange rate volatility, according to data from the Bank of Korea. (Yonhap)
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Overview

  • The Korean won slid to levels not seen since 2009, trading broadly in the 1,529–1,561 range as foreign investors continued a sustained selling streak.
  • Finance Minister Koo Yun-cheol and Bank of Korea Governor Shin Hyun-song publicly vowed rapid action to counter excessive foreign exchange moves and said they have the tools to intervene if needed.
  • Strong offshore selling helped push the Kospi down about 5 percent on Friday, triggering intraday trading curbs and sharp losses in major tech names such as Samsung Electronics and SK hynix.
  • Officials flagged rising margin loans, thinning market liquidity including lower stablecoin balances on Korean crypto platforms, and large daily net outflows of trillions of won as key financial vulnerabilities they are watching closely.
  • Authorities stressed that core economic indicators remain resilient, citing a recent OECD growth upgrade and stronger exports, but warned that exchange rate pressure could raise consumer prices and complicate policy choices going forward.