Won Poised to Jump 4% This Quarter on Boost From Policy, Inflows
The South Korean won is on track for a 4% gain this quarter, supported by government measures to curb volatility and a flood of foreign capital into local stocks, according to local analysts.
NH Investment & Securities Co. and Korea Investment & Securities Co. expect the won to reach 1,400 per dollar by the end of the first quarter, while Woori Bank and Kookmin Bank forecast it to reach 1,420 over the same period. The currency ended last week around 1,459.
Won’s outlook is improving after underperforming emerging Asian peers in the last six months thanks to , verbal intervention from authorities and currency hedging by the National Pension Service. This policy support has helped offset outflows from domestic investors buying offshore assets and fears that US investment commitments tied to trade talks could strain the won.
For Gyeong-Won Min , an economist at Woori Bank, the currency is also finding a tailwind in the equity market.
“Authorities have put out the immediate fires at year-end, and with the Kospi starting the year on a strong note, foreign equity inflows are likely to offset outbound investment by local investors,” he said.
Stock inflows into South Korea have risen to close to $1 billion in just the first week of 2026 on the back of an AI-driven rally, propelling the Kospi index to the top of major global equity rankings. Citigroup Inc. has flagged South Korea and Taiwan as core beneficiaries of the AI investment cycle, a trend it said could support further won gains.
Beyond the stock market, the broader economic backdrop is also supportive of the won. The Bank of Korea held its benchmark rate steady at 2.5% in late November and is forecast to keep the policy unchanged this week.
“Given the impact of the government’s supply-demand measures as well as domestic fundamentals and flow conditions, Korea is entering a phase where downside pressure on the USD/KRW exchange rate should dominate,” said Dawoon Moon, an economist at Korea Investment & Securities .
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