Excluding the Second Half of Last Year and the First Half of This Year
Reinclusion in the List Due to Sharp Increase in Current Account Surplus
On the 14th (local time), the U.S. Department of the Treasury once again designated South Korea as a currency monitoring country.
In the semi-annual report titled "Macroeconomic and Foreign Exchange Policies of Major Trading Partners" submitted to Congress on the same day, the Treasury designated seven countries, including South Korea, China, Japan, Singapore, Taiwan, Vietnam, and Germany, as currency monitoring countries.
Previously, South Korea was removed from the currency monitoring list in November 2023 after more than seven years since April 2016, and was also excluded in the June report, but this time it was added back to the currency monitoring list. The other six countries were also on the currency monitoring list in June.
According to the Trade Facilitation and Trade Enforcement Act enacted in 2015, the U.S. evaluates the macroeconomic and foreign exchange policies of the top 20 countries with the largest trade volume with the U.S., and designates them as either a comprehensive analysis country or a monitoring country if they meet certain criteria.
The current evaluation criteria are ▲ a trade surplus with the U.S. of $15 billion (approximately 21 trillion KRW) or more ▲ a current account surplus equivalent to 3% or more of gross domestic product (GDP) ▲ net purchases of dollars for at least 8 out of 12 months, with the amount exceeding 2% of GDP.
If a country meets all three criteria, it is designated as a comprehensive analysis country; if it meets two, it becomes a monitoring country.
South Korea, which only met the trade surplus criterion in the previous report, was also flagged for its current account surplus this time. The Treasury announced that as of the end of June 2024, South Korea's annual current account surplus accounted for 3.7% of its GDP.
This is a sharp increase from 0.2% a year earlier, mainly due to strong external demand for South Korea's technology-related products, which increased the goods surplus. South Korea's trade surplus with the U.S. rose from $38 billion the previous year to $50 billion (approximately 70 trillion KRW).
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