Korea Investment & Securities Raises 'Geumjjoki' Exchange Rate Forecast to 1,420 Won per Dollar for Next Year

Korea Investment & Securities announced on the 18th that it has raised its 2026 won-dollar exchange rate forecast from 1,390 won to 1,420 won.

Moon Daun, a researcher at Korea Investment & Securities, stated in the "Exchange Rate Outlook Update: Golden Child Exchange Rate" report released that day, "We have reflected the gap between the actual exchange rate and our forecast for the fourth quarter." He raised next year's exchange rate forecast to 1,420 won per dollar and suggested a reasonable range of 1,350 to 1,500 won. This means that the value of the Korean won is expected to be lower next year compared to the previous forecast.

On the 17th, as the KOSPI index fluctuated around the 4000 mark at the start of trading, the KOSPI, exchange rate, and KOSDAQ indices were displayed on the index status board in the dealing room of Hana Bank in Jung-gu, Seoul. 2025.12.17 Photo by Yoon Dongju

Researcher Moon predicted, "Expectations for the upper and lower bounds of the exchange rate, once elevated, are unlikely to come down easily. If the structural upward pressure continues next year, expectations could rise further." As of December 16, the average dollar-won exchange rate in the fourth quarter stood at 1,450 won, significantly exceeding the forecast of 1,420 won.

He added, "As the exchange rate approaches the lower end of the reasonable range, upward pressure from bargain buying of dollars will intensify, while approaching the upper end, downward pressure from concerns about government intervention and dollar selling at high levels will become stronger." He explained, "The trajectory of the exchange rate is expected to follow the same 'low in the first half, high in the second half' pattern as the annual outlook." Specifically, he believes that the won-dollar exchange rate is likely to fall toward the lower end of the range and lower the quarterly average in the first half of the year, when Korea's economic and supply-demand conditions are expected to be relatively favorable. However, toward the end of the year, the dollar is expected to rebound along with the recovery of the U.S. economy.

In the short term, he assessed that there is more room for the exchange rate to fall rather than rise further. Researcher Moon noted, "Since the current rate is already well above the level estimated based on macro fundamentals, it is difficult to gauge the exact timing and extent of a decline." He diagnosed, "Fundamentally, there needs to be a calming of supply-demand imbalances and sentiment toward a weaker won." Notable market events include the Bank of Japan's monetary policy meeting results scheduled for the 19th, and the U.S. December employment report to be released on January 9.