The South Korean government's foreign exchange intervention (primarily selling USD to defend the won's value) is a sensitive issue that can raise concerns about designation as a currency manipulator by the United States. However, as of November 2025, while there is a risk of designation, it remains low.1. U.S. Treasury’s Currency Manipulator Criteria (Three Key Thresholds)The U.S. Treasury evaluates major trading partners’ exchange rate policies in its semi-annual report. A country is designated as a currency manipulator only if all three of the following criteria are met:
- Bilateral trade surplus with the U.S.: Exceeding $15 billion.
- Current account surplus: Greater than 3% of GDP.
- Persistent, one-sided intervention in the foreign exchange market: Net purchases of foreign currency for at least 8 out of 12 months, amounting to more than 2% of GDP.
If two or more criteria are met, the country is placed on the Monitoring List.
- Manipulator designation → potential sanctions (e.g., trade negotiation pressure, tariff increases).
- Monitoring List → heightened scrutiny only.
2. South Korea’s Current Status (Based on First Half of 2025)
- Trade surplus with the U.S.: ~$66 billion → Meets criterion.
- Current account surplus: 5.3% of GDP → Meets criterion.
- FX intervention: Does not yet meet criterion (limited in scale and direction—selling USD, not buying).
As a result, South Korea met two criteria and was re-added to the Monitoring List in the June 2025 Treasury report. However, since all three were not met, it avoided manipulator designation.
Despite recent sharp won depreciation (reaching the 1,470 KRW/USD level in November), the Bank of Korea’s interventions—both verbal and actual USD sales—continue. So far, they remain within acceptable bounds, but the U.S. is closely watching.
11/15/2025 8:31 PM
Contributor : Sharon Liu Fau
sharonliufau@gmail.com
