Bank of Korea Governor Hyun Song Shin said on the 9th that "there is considerable room for the won to turn to strength going forward."
Appearing at a plenary session of the National Assembly's Finance, Economy and Planning Committee, Shin said, "The exchange rate is rising due to dollar strength driven by U.S. monetary policy and portfolio rebalancing by foreign investors, but over the long term, fundamental value is the important factor." The remark is interpreted as meaning that the excessive rise in the exchange rate could ease when considering the won's fundamental value.
"The current account surplus is also accumulating at a very large scale, and I think foreign investors' stock selling will subside in the second half of this year," he said, suggesting the exchange rate could decline.
On a Korea-U.S. currency swap, Shin took a cautious stance, saying dollar liquidity is sufficient. "There are consultations between governments (regarding a currency swap), and there are always discussions within the framework of cooperation between central banks," he said. "But a currency swap is a mechanism that provides liquidity when liquidity has dried up, and in the current situation, liquidity is not lacking," he said, drawing a clear line.
Regarding won-based stablecoins, Shin said, "As I stated during the confirmation hearing, there is absolutely no change in my position that a won-based stablecoin system should be introduced promptly." He added, "Stablecoins and central bank deposit tokens each have specialized uses, and they will maintain a competitive and complementary relationship with each other, sustaining the monetary ecosystem."
