US Treasury Maintains South Korea as 'Currency Monitoring Target'... Included in List of 10 Countries

The US Treasury has once again designated South Korea as a 'currency monitoring target' that requires close scrutiny of its monetary and macroeconomic policies.

On the 29th (local time), the US Treasury included South Korea among 10 countries in its 'Semi-Annual Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners (July 2024 - June 2025)' submitted to Congress. The targeted countries include South Korea, Japan, China, Singapore, Taiwan, Thailand, Vietnam, Germany, Ireland, and Switzerland. Compared to the report from June last year, Thailand has been newly added.

South Korea was removed from the currency monitoring target list in November 2023, after being on it for over seven years since April 2016, but was included again in the list last November, just before the second term of the Trump administration began. Following the report from June last year, it has maintained its status as a monitoring target once again.

Even if designated as a currency monitoring target, the US does not impose immediate sanctions or disadvantages. This system is intended to check whether countries artificially intervene in the foreign exchange market to enhance their export competitiveness, and it does not prohibit normal measures for market stability, according to the explanation.

Under the Trade Promotion Act enacted in 2015, the US evaluates the macroeconomic and exchange rate policies of the top 20 countries with significant trade volumes. The evaluation criteria are: △ a trade surplus with the US of over $15 billion △ a current account surplus exceeding 3% of GDP △ net purchases of dollars for at least 8 out of 12 months, with the net purchase amount exceeding 2% of GDP. If two of these criteria are met, the country is designated as a monitoring target; if all three are met, it is designated as a country for in-depth analysis.

In this evaluation, South Korea was found to meet the criteria for trade surplus with the US and current account surplus. According to the report, during the relevant period, South Korea's trade surplus with the US was $52 billion, and the current account surplus was approximately 5.9% of GDP. There were no countries designated for in-depth analysis in this report.

Scott Bessenet, the US Treasury Secretary, stated, "The Treasury is closely monitoring whether trading partners manipulate their currencies through foreign exchange interventions or non-market practices to gain an unfair competitive advantage." He also added, "We are strengthening our analysis of the currency policies and practices of major trading partners to support President Trump's 'America First Trade Policy.'"