Codit Publishes Issue Paper Analyzing "2025 US Exchange Rate Report"

Four Key Strategies Proposed, Including Response to Exchange Rate-Security Linkages

The Global Policy Demonstration Research Institute, affiliated with Codit, announced on June 10 that it has published an issue paper titled "Analysis of the 2025 US Exchange Rate Report and Preparing for Trade Risks: Korea's Response Strategy," which provides an in-depth analysis of the "2025 Exchange Rate Report" recently released by the US Department of the Treasury.

The US Treasury's exchange rate report is a regular publication that reviews the macroeconomy and exchange rate policies of major trading partners. However, this year's report is drawing attention because it goes beyond a simple economic assessment and functions as a strategic tool for trade pressure, combined with tariff policy.

Codit-affiliated Global Policy Demonstration Research Institute announced on the 10th that it has published an analysis issue paper titled "2025 US Exchange Rate Report." Codit

The exchange rate report has expanded its evaluation scope beyond traditional analysis focused on foreign exchange market intervention to include capital flow measures, macroprudential measures, and interventions by government investment institutions such as pension funds and sovereign wealth funds, thereby clarifying its role as a tool for trade pressure. As a result, in addition to the repeatedly raised issue of transparency in foreign exchange market interventions, Korea is expected to face increased scrutiny over the operational transparency of its government investment institutions.

The issue paper emphasizes that these changes further structure Korea's trade risks and highlight the urgent need for Korea to establish response strategies under the pressure structure that links tariffs and exchange rates.

Through the issue paper, the institute stated, "Korea needs to establish a mid- to long-term integrated strategy that takes into account the structural trade pressure scenarios from the United States, going beyond short-term responses." The institute presented four specific response strategies: ▲strengthening integrated strategic planning and policy consistency, ▲enhancing diplomatic capacity and negotiation power to respond to the new trade order, ▲reinforcing risk management and response systems for exchange rate-security linkages, and ▲improving systems and legal frameworks to ensure the transparency and independence of government investment institutions.

The institute also noted, "Due to the 'America First' policy of the Trump administration, the exchange rate report is now likely to influence not only trade policy but also the investment activities of individual government investment institutions," and added, "The Korean government and National Assembly must further advance their joint response system to respond more proactively and systematically to complex pressure situations."