Six-Month Achievements of the Lee Jaemyung Administration
Speculation on a Weaker Won... "Let Me Be Clear, We Have Measures to Respond to Exchange Rates"
Tasks Underway for Repatriation of Overseas Corporate Profits and Managing Household Overse
The Office of the President has stated that it has appropriate measures in place to address the ongoing weakness of the Korean won and is actively working on tasks such as repatriating overseas earnings by corporations, managing risks associated with household overseas investments, and handling the National Pension Service's overseas investments and currency hedging. In addition to the '10·15 Real Estate Measures,' which put a brake on the rise in real estate prices in the Seoul metropolitan area, the office expressed confidence in its ability to manage risks across the broader economy, saying, "All policy preparations are in place." Furthermore, the office noted that there has been little progress in improving inter-Korean relations since the inauguration of the Lee Jaemyung administration, but announced plans to fully initiate the Korean Peninsula peace and coexistence process starting next year.
This message was delivered during a press briefing on the six-month achievements of the Lee Jaemyung administration, held the previous day (December 7), with key senior secretaries in attendance, including Kang Hoonshik, Chief Presidential Secretary, Kim Yongbeom, Chief Policy Secretary, and Wi Sunglak, Chief National Security Secretary. The emphasis was on the fact that, while risks exist, they remain within a manageable range.
In response to a question about concerns over the recent depreciation of the won against the dollar, Kim Yongbeom stated that the government has countermeasures in place against speculative bets on a weaker won amid high exchange rates. He said, "There are movements betting on a weaker won due to the perception that exchange rate adjustments are not progressing well," and stressed, "Let me be clear: we have appropriate measures in place."
Kim also explained that the government is working on three key areas: repatriation of overseas earnings by corporations, risk assessment of individual overseas investments, and the allocation of the National Pension Service's overseas investments. The initiative to encourage corporations to repatriate overseas earnings aims to have large exporters and global companies more actively utilize profits earned abroad for domestic investment, dividends, and debt repayment, thereby easing foreign currency supply and demand pressures.
Risk assessment of household overseas investments will also be strengthened. The government believes that 'direct overseas investment'-which has become commonplace since the pandemic-could increase market volatility if it turns into a rush for short-term currency gains during a period of won weakness. The government plans to enhance warnings about currency risks, provide more information, and monitor high-risk products to curb excessive dollar-centric investments.
Adjusting the National Pension Service's allocation between domestic and overseas assets, as well as its currency hedging strategy, is also under consideration as a way to respond to exchange rate fluctuations. Recently, the government included the National Pension Service in its currency response task force, frequently mentioning strategic currency hedging and foreign exchange swaps. The National Pension Service's overseas assets-including stocks, bonds, and alternative investments-total 798 trillion won, surpassing Korea's foreign exchange reserves of 430.6 billion dollars (about 630 trillion won).
"Real Estate Stabilization Measures Already Prepared... '10·15 Measures' Serve as a Brake on Overconcentration"
Regarding real estate price stabilization, the office stated, "Measures are already prepared," emphasizing that fundamental improvement must be achieved through long-term balanced national development.
When asked about the intent behind President Lee Jaemyung's remarks at a town hall meeting in South Chungcheong Province on December 5, Kang Hoonshik replied, "The Office of the President and the government have already completed policy preparations to stabilize real estate prices." President Lee had previously commented at the town hall that "to be honest, there are no immediate measures for real estate," highlighting the importance of balanced development as the ultimate solution.
Ha Joonkyung, Senior Secretary for Economic Growth, who also attended the briefing, said, "Please understand that this was meant to convey how challenging the real estate sector is," and emphasized, "It's not a problem that can be easily solved with one-off policies." He added, "We hold one or two review meetings per week regarding supply, working to resolve obstacles such as conflicts of interest and delays in permits. We continuously monitor market conditions to prevent excessive demand concentration and are prepared to introduce additional measures if necessary." He further explained, "More fundamentally, we are strengthening policies that favor regional areas to alleviate the concentration in the Seoul metropolitan area itself."
Regarding the '10·15 Real Estate Measures' announced on October 15, he characterized them as "serving as a slight brake, as the concentration in specific areas had become too strong." Under the '10·15 Measures,' the government designated all of Seoul and 12 areas in Gyeonggi Province as land transaction permit zones and tightened lending conditions by reducing the loan-to-value (LTV) ratio for mortgage loans in speculative zones to 40 percent.
"2026 Will Be the First Year of Diplomatic and Security Advancement"... Full-Scale Korean Peninsula Peace Process
There was also an assessment that there has been little progress in inter-Korean relations and the Korean Peninsula peace process. Wi Sunglak, Chief National Security Secretary, stated, "Over the past six months, there has been little progress in inter-Korean relations," adding, "The North has shown no willingness to respond." However, he noted that during this period, South Korea and the United States have coordinated on issues such as North Korea's nuclear program, tariffs, and security; normalized relations with Japan; and restored relations with China from their lowest point. "From now on, we will channel this energy into the Korean Peninsula peace and coexistence process," he announced.
Regarding the possibility of North Korea-U.S. contact next year, he commented, "While I cannot specify the exact timing, it is more likely that the U.S. and North Korea will move before the two Koreas do." When asked whether a reduction in South Korea-U.S. joint military exercises might be used as a bargaining chip, he replied, "We are considering various options, but at this time, using joint exercises as a direct bargaining chip is not under consideration," reaffirming the principle of maintaining sanctions and deterrence.
As for the absence of North Korea-related content in the recently released National Security Strategy (NSS) report by the second Donald Trump administration in the United States, he dismissed the need for immediate significance, stating, "The fundamental guidelines for drafting the report are different." In diplomatic circles, there have been conflicting interpretations: some see it as evidence that the U.S. is not interested in North Korea-U.S. dialogue, while others suggest it signals a possible softening of the U.S. stance on North Korea's denuclearization. Wi said, "This time, the report focused on 'America First' as the basic guideline, so it did not address specific regional disputes or major issues in detail," adding, "These topics will likely be addressed in subordinate documents."
Meanwhile, regarding follow-up measures to the security negotiations held at the South Korea-U.S. summit, visible results are expected in the first half of next year. Kim Hyunjong, First Deputy Chief of the National Security Office, explained, "Within the National Security Office, we have established three task forces: one on enriched uranium, one on nuclear-powered submarines, and one on the defense budget. We are currently developing roadmaps for discussions with the United States on each topic, and working-level consultations with the U.S. have begun this month."
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