South Korea US Currency Watchlist: Talks Continue Between South Korea and US

Intermediate | June 12, 2025

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Why is South Korea on the South Korea US Currency Watchlist?

The Treasury’s Recent Report

Recently, the United States Treasury Department released a report about the currency practices of its major trading partners. In this report, South Korea was kept on a special “South Korea US currency watchlist.” This means the US is watching South Korea’s actions related to its currency, the won, very closely.

Reasons for Being on the Monitoring List

Countries get on this list if they meet certain conditions. For South Korea, the US pointed to two main reasons. First, South Korea has a large trade surplus with the US, meaning they sell a lot more goods to the US than they buy. Second, South Korea has a big current account surplus, which is a broader measure of money coming into the country compared to money going out.

What Happens Next?

No Immediate Punishments, But Ongoing Talks

Being on the South Korea US currency watchlist doesn’t mean South Korea is doing anything wrong or that there are immediate punishments. However, it does signal that the US wants to have conversations about these economic imbalances. South Korea’s government, through its Finance Ministry, has said they will continue to talk with the US Treasury. They want to increase understanding and build trust about their currency policies.

Part of Broader Trade Negotiations

These currency discussions are also part of bigger trade talks happening between South Korea and the US. The two countries are trying to reach a wider agreement on trade issues by July 8th. Currency policy is a key topic in these important negotiations.

Expanding the Scope of Currency Influence

The US Treasury also mentioned in its report that it might start looking at new ways countries can influence their currencies, not just direct buying or selling. This could include how government-linked funds, like pension funds, affect the currency market. This potential for broader examination is something South Korea is considering carefully.

Vocabulary

Monitoring list (noun phrase): A list of countries that another country is watching closely because of their economic or financial practices.
- Example: “The country was placed on the “monitoring list” for its trade practices.”
Forex (noun): Short for “foreign exchange,” referring to the system of changing one type of currency for another.
- Example: “She works in “forex” trading.”
Treasury Department (proper noun): A government department responsible for managing government revenue and regulating financial matters.
- Example: “The US “Treasury Department” issued the report.”
Bilateral (adjective): Involving two groups or countries.
- Example: “They are having “bilateral” talks.”
Surplus (noun): An amount of something left over when requirements have been met; an excess of production or supply over demand.
- Example: “The company reported a large trade “surplus”.”
Current account (noun phrase): A broad measure of a country’s international transactions, including trade in goods and services, income, and transfers.
- Example: “The “current account” surplus increased last year.”
GDP (abbreviation): Gross Domestic Product; the total value of goods and services produced in a country in a specific time period.
- Example: “The country’s economy grew by 3% of its “GDP”.”
Intervention (noun): The action or process of intervening in something.
- Example: “Market “intervention” can affect currency values.”
Scrutiny (noun): Critical observation or examination.
- Example: “The company is under close “scrutiny”.”
Policy (noun): A course or principle of action adopted or proposed by a government, party, business, or individual.
- Example: “The government is discussing its economic “policy”.”

Discussion Questions (About the Article)

What does it mean for South Korea to be on the US currency monitoring list?
What are the main reasons the US put South Korea on this list?
How has the South Korean government responded to being on the list?
Why are currency talks part of the larger trade negotiations?
What new area of currency influence might the US Treasury start watching?

Discussion Questions (About the Topic)

Why do countries sometimes try to influence the value of their currency?
How might a country’s currency value affect its businesses that export goods?
What are the potential benefits and drawbacks of being on a currency watchlist?
How might economic policies in one country affect the economy of another country?
Why is international cooperation important in managing global financial issues?

Related Idiom

“Under the microscope”

Meaning: Being subject to intense scrutiny or detailed examination.
Example: “After being added to the watchlist, the country’s financial policies are now “under the microscope”.”

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This article was inspired by: Bloomberg, June 6, 2025.