03.09.202502:21:30UTC+00SK Won Rises on Growth and Trade Support Measures

On Wednesday, the South Korean won appreciated to approximately 1,392 per dollar, reversing a three-day downward trend as investors absorbed a stream of economic data and gained confidence from new government initiatives. Recent statistics indicated a shift from economic contraction to growth, with the economy expanding by 0.7% quarter-on-quarter in Q2 2025, surpassing predictions of a 0.6% increase and bolstering the positive outlook for growth. Additionally, South Korea's foreign exchange reserves increased to $416.3 billion in August, up from $411.3 billion in July. This rise was driven by higher securities holdings and significant deposit growth, enhancing the nation's external buffers and reducing fiscal risk concerns. Further fueling this positive trajectory, the South Korean government announced a KRW 570 billion emergency financial aid package for the steel and aluminum sectors. This package aims to alleviate the effects of a 50% US tariff and includes targeted low-interest lending facilities and interest-rate support measures for small and medium-sized enterprises (SMEs).