US agrees South Korea not a currency manipulator, Seoul says

SEOUL: The United States has agreed that South Korea is not manipulating its currency for trade advantage, a spokesperson for President Lee Jae Myung said on Sunday.

AI Brief

South Korea was not labeled a currency manipulator by the US, despite being on a monitoring list due to trade and account surpluses.
Seoul is negotiating a US$350 billion investment tied to tariff talks but says it cannot pay upfront without financial safeguards.
South Korea seeks a currency swap to support the investment, while warning of economic risks similar to its 1997 crisis.

The two allies agreed that Seoul does not fall under the manipulator designation that the U.S. Treasury Department announces in reports twice a year, Kang Yu-jung told a press conference.

Officials at the U.S. embassy in Seoul could not be reached for comment outside business hours.

The administration of President Joe Biden added South Korea to a manipulation monitoring list in November due to its large current account surplus and its sizable trade surplus with the U.S. The government of Donald Trumpkept Seoul on the list in June.

Under a 2015 U.S. law, Washington can take "remedial action" against countries that do not "correct the undervaluation of their currency and trade surplus with the United States".

The South Korea-U.S. deal is not related to talks on a currency swap as part of bilateral negotiations over Trump's tariffs on South Korean goods, South Korean officials said.

President Lee told Treasury Secretary Scott Bessent on Wednesday in New York that the Asian country needs a foreign exchange swap in order to make the $350 billion investment it has pledged in the tariff talks, Finance Minister Koo Yun-cheol said on Saturday.

Koo quoted Bessent as saying he would discuss the issue with other U.S. officials and get back to South Korea.

South Korean National Security Adviser Wi Sung-lac reiterated on Saturday that Seoul cannot pay the $350 billion "upfront", as Trump has suggested in recent days. President Lee told Reuters this month that South Korea's economy could fall into crisis rivalling its 1997 meltdown if the government accepted the U.S. demands without safeguards.

Koo said he had not heard anything about a Wall Street Journal report that Commerce Secretary Howard Lutnick had discussed raising the $350 billion investment.