Lee: "Exchange Rate Will Fall to Around 1,400 Won, Tax Policies Will Be Used for Real Estate If Unavoidable" (Comprehensive)

President Lee’s New Year Press Conference on the 21st
Flood of Questions on the Economy After Opening Remarks
Lee: "Korea is enduring the exchange rate better than Japan"
On Real Estate Measures: "Supply Plan to Be Announced Soon"
"100% Semico

On the 21st, President Lee Jae-myung assessed the recent high exchange rate issue, stating that "(Korea) is holding up relatively well." He also projected that the exchange rate would decline in one to two months. Regarding the real estate issue, he announced that a supply plan would be released soon, while leaving open the possibility of utilizing tax policy.

"Exchange rate will fall to around 1,400 won; Korea is holding up well compared to Japan"

President Lee Jae-myung is answering reporters' questions at the New Year's press conference held at the Blue House State Guest House on the 21st. Photo by Yonhap News

President Lee made these remarks during a press conference held at the Blue House State Guest House under the theme "A Grand Transformation Together, A Great Leap Forward for All."

During the Q&A session following President Lee's opening statement, which focused on the "people's livelihood and the economy," the first question raised was about the exchange rate. When asked about measures to address the recent high exchange rate, President Lee responded, "If there were any special measures, we would have already implemented them," adding, "This is not a phenomenon unique to Korea, so it is difficult to restore the situation with policies unique to Korea alone."

He continued, "According to the responsible authorities, it is predicted that the exchange rate will fall to around 1,400 won in about one or two months."

However, President Lee explained, "The won-dollar exchange rate is partly linked to the yen-dollar exchange rate," and added, "Compared to Japan, our currency has depreciated less." He further elaborated, "If we were to align with Japan's standards, the won-dollar exchange rate should be around 1,600 won, but we are still holding up relatively well."

President Lee also emphasized, "We will continue to explore all possible measures and strive to stabilize the exchange rate."

"Real estate supply measures to be announced soon; tax policy will be used if necessary"

President Lee Jae-myung is answering reporters' questions at the New Year's press conference held at the Blue House State Guest House on the 21st. Photo by Yonhap News

Regarding real estate policy, he remarked, "If (tax regulation) becomes necessary, there is no reason not to use it just because it is not ideal." President Lee stated, "It is not desirable to use tax policy as a regulatory tool for (real estate), and it should be refrained from as much as possible," but also pointed out, "If the situation requires it, of course, tax measures should be mobilized."

President Lee specifically mentioned the long-term ownership special deduction, questioning, "Why should taxes be reduced for those who have held real estate for a long time for speculative or investment purposes without living in it themselves?" He criticized, "It is unreasonable to reduce taxes just because someone holds speculative real estate for a long time."

However, President Lee expressed a negative stance on strengthening property holding taxes, saying, "Politically, it is not right and it imposes an unfair burden on our citizens." He dismissed the idea, adding, "There are rumors about imposing property holding taxes only on properties worth over 5 billion won, but for now, we are not seriously considering using tax policy for real estate policy."

Additionally, President Lee announced that, from the perspective of real estate supply, "The Ministry of Land, Infrastructure and Transport will soon announce practical measures to expand supply."

He stated, "Rather than abstract figures, we intend to present very specific and practical measures," and added, "We are exploring supply methods such as new construction, as well as ways to encourage owners of multiple properties to put them on the market."

"No concerns about 100% semiconductor tariffs... U.S. prices will rise"

President Lee Jae-myung is responding to questions from the press at the New Year's press conference held at the Blue House State Guest House on the 21st. Photo by Yonhap News

There was also a question expressing concern about the Trump administration's pressure to impose a "100% tariff on semiconductors." President Lee responded, "I am not seriously concerned." He explained, "These are common topics that arise, and there are so many unexpected factors that emerge in unstable situations that you cannot maintain your composure if you react emotionally. In such times, it is important to remain focused and respond according to principles."

President Lee continued, "Korea and Taiwan together will account for 80-90% of the global semiconductor market share," and predicted, "If the U.S. imposes a 100% tariff, the price of semiconductors in the U.S. will likely double." He added, "Of course, we may bear a small portion of the burden, but most of it will likely be passed on to U.S. prices."

President Lee also stated, "We have already reached an agreement with the U.S. to ensure we are not treated less favorably than Taiwan in terms of semiconductor tariffs," adding, "We have preemptively reached agreements to prepare for such situations."

Regarding the U.S. pressure to build semiconductor factories, President Lee drew a line, saying, "These are various topics that can emerge during negotiations." He explained, "Of course, the U.S. would want to build many semiconductor factories domestically. Although we are facing rough waves, it is not a risk severe enough to damage or destroy the ship, so we will be able to get through it."

In closing, President Lee added, "There is no need to worry too much. Our capable negotiation teams at the Ministry of Trade, Industry and Energy will handle it well."

Using retirement pension funds to defend the foreign exchange market?..."Malicious fake news"

President Lee Jae-myung is answering questions from foreign reporters at the New Year's press conference held at the Blue House's State Guest House on the 21st. Photo by Yonhap News

Regarding claims from some quarters that "the government is trying to defend the foreign exchange market by converting retirement pensions into funds," President Lee denounced this as "malicious fake news." He explained, "Not only is it impossible, but there is no need to do so, and there is absolutely no intention to do so."

President Lee's remarks are interpreted as a response to claims made the previous day by the People Power Party. Previously, the People Power Party had criticized, "We strongly oppose the Lee Jae-myung administration's push to convert workers' retirement pensions into funds. There are rampant ideas about using them to defend the exchange rate amid the current serious exchange rate issue."

President Lee asserted, "(Retirement pension fund conversion) cannot be done if the parties involved do not want it," and emphasized, "Do not misunderstand. If it is not wanted, it will not be done; it will not be made worse, and we will never do anything unreasonable that would draw criticism."

However, President Lee argued, "It is true that there should be some measures." He pointed out, "The rate of return on retirement pensions is around 1%," and questioned, "Should we leave it neglected when management is not going well?" Considering the current state of retirement pensions, he suggested that fund conversion could be discussed as one of the alternatives.

President Lee further stated, "Retirement pensions are important assets both socially and personally, and if the rate of return is lower than inflation, it results in losses." He called for action, saying, "There are discussions in academia and the political sphere about establishing measures for retirement pensions, and there should be a plan."

President's stern warning: "I will show that manipulating stock prices will ruin families"

President Lee Jae-myung is answering reporters' questions at the New Year's press conference held at the Blue House's Guesthouse on the 21st. Photo by Yonhap News

Meanwhile, regarding the recent KOSPI index approaching 5,000, President Lee assessed, "What was previously distorted is now returning to normal." Citing peace, management, governance, and market risks as the reasons for the previous underperformance of stock prices, President Lee asked, "Aren't stock prices undervalued due to these four factors, and wouldn't things improve if we resolve them?"

President Lee continued, "It is not about artificially boosting stock prices; normalization is what matters." He warned, "I will make it clear that manipulating stock prices will ruin families. Those who manipulate stock prices should come to their senses." He also cautioned, "Stock investment is something each individual must manage on their own. No one will take responsibility for you."