Lee Changyong: "Separate Exchange Rate Talks at Korea-US 2+2 Meeting, Not Bad News"

Reduced Uncertainty Viewed as a Positive Sign

Bank of Korea Governor Lee Changyong described the agreement reached at the Korea-US 2+2 Trade Talks for the two countries' financial authorities to discuss exchange rate issues separately as "not bad news."

Governor Lee made these remarks during a press conference at a restaurant near Washington DC on the 25th (local time), stating, "If exchange rate issues need to be discussed, it is better to do so separately with the Treasury Department." He is currently in the United States to attend the G20 Finance Ministers and Central Bank Governors Meeting.

Bank of Korea Governor Lee Changyong is holding a press conference at a restaurant near Washington DC on the 25th (local time). Photo by Yonhap News

He explained, "Exchange rates are easily politicized, and unless you are an economist, it is difficult to fully understand their nature. If one only looks at how much the currency has depreciated and focuses solely on the impact on trade, negotiations become challenging." He added, "The US Treasury Department, like our Ministry of Economy and Finance, is a group of experts on exchange rates. If both sides, who have a high level of understanding, conduct consultations, much more professional discussions will be possible."

Governor Lee further explained that since exchange rates are the result of a 'complex equation' involving a variety of domestic and international factors, having the financial authorities of both countries discuss these issues separately from trade matters could facilitate future negotiations.

Previously, the government announced that as a result of the Korea-US 2+2 Trade Talks, the two countries had reached a consensus to prepare a 'July Package' aimed at abolishing tariffs by July 8, before the 90-day mutual tariff suspension ends. In addition, the two sides agreed to focus future discussions on four key areas: tariffs and non-tariff measures, economic security, investment cooperation, and monetary (exchange rate) policy. Among these, it was decided that exchange rate policy would be discussed separately between the Ministry of Economy and Finance and the US Treasury Department.

Governor Lee commented, "I view the fact that the broad framework of the consultations has been discussed and that uncertainty has been reduced as positive." However, he also noted, "Since consultations can sometimes stall, we need to continue monitoring the situation."