The U.S. Treasury Department on June 5 (local time) announced its ‘Report on the Macroeconomic and Foreign Exchange Policies of Major Trading Partners’, classifying South Korea and eight other countries as currency monitoring countries.
In 2024, South Korea recorded a surplus of 55 billion dollars in trade of goods and services with the United States, and its current account surplus amounted to 5.3% of the GDP, meeting the evaluation criteria in both aspects. The foreign exchange market intervention was at -0.6% of GDP, not meeting the criteria.
In this evaluation, the U.S. Treasury Department classified countries that met two out of three Trade Facilitation Act criteria: a trade surplus of over 15 billion dollars with the U.S., a current account surplus exceeding 3% of GDP, and net dollar purchases exceeding 2% of GDP for more than eight months, as monitoring countries.
Besides South Korea, the monitoring countries included Japan, China, Germany, and Singapore, among others, totaling nine countries. There were no countries that required deeper analysis.
The U.S. Treasury Department announced in this report that from the next round, it plans to expand the evaluation criteria concerning each country’s monetary policies and related practices. It also stated that capital inflow/outflow measures, macroprudential measures, and the use of pension funds or sovereign wealth funds will be included for review, in addition to market interventions.
The South Korean government expressed its intent to continue discussions with the U.S. on exchange rate matters. The Ministry of Finance stated that it plans to maintain transparency and predictability in exchange rate policies by ensuring constant communication with the U.S. Treasury Department to enhance mutual trust and understanding between the two countries.
