The US government demands the correction of excessive dollar strength.

■ The Bank of Korea's warnings about inflation suggest the end of its easing cycle, but the won's depreciation and the dollar's strengthening persist.  
■ If Trump's tariffs are ruled unconstitutional, given their impact on the US economy, demands to correct the dollar's excessive strength may intensify. 
 
On the 14th, US Treasury Secretary Bessent stated that he held talks with South Korea's Deputy Prime Minister and Minister of Strategy and Finance on the 12th, and the recent won was among the topics discussed. The US Treasury Department released a joint statement with South Korea on September 30, 2021, which included "agreeing to continue close consultations on macroeconomic and foreign exchange issues" and "reaffirming non-manipulation of exchange rates and the international monetary system." This US-South Korea meeting largely continued these positions. The won's exchange rate against the dollar plummeted from 1403.85 won to 1 dollar (closing price) at the end of September last year to 1480.03 won at the end of December. Still, it rebounded to 1428.70 won with support measures from the National Pension Service and verbal intervention from the authorities, temporarily curbing the won's depreciation and the dollar's strengthening. 

 
The Bank of Korea (BOK) kept its policy rate unchanged at 2.50% on March 15. BOK Governor Ree Chang-yong stated that, against the backdrop of geopolitical uncertainty and persistent capital outflow risks, this signaled the end of the easing cycle and heightened vigilance regarding the potential for inflation caused by the depreciation of the won, which could push up import prices. Following the market-expected policy decision, the won weakened again, briefly falling to 1474.60 won per US dollar during Asian trading hours on March 16. The South Korean government estimates that, due to low growth and the recent depreciation of the won and the strengthening of the US dollar, per capita GDP in 2025 will be $36,000 (a year-on-year decrease of 0.3%), the first decline in three years. The economic growth rate in 2026 is projected to rebound to 2.0% through a focus on developing industries such as semiconductors and artificial intelligence (AI). 
 
On March 14, the US Supreme Court decided to postpone its ruling on a lawsuit concerning the constitutionality of the Trump administration's imposition of reciprocal tariffs on various countries without congressional approval under the International Emergency Economic Powers Act (IEEPA), which allows for restrictions on economic transactions during emergencies. The report states that if the Supreme Court finds it unconstitutional, it could result in tariff refunds exceeding $130 billion. However, in the short term, the market will remain focused on the trajectory of these refunds and their impact on the US economy. The Trump administration has indicated it will consider imposing additional tariffs under Section 232 of the Trade Expansion Act (which allows for tariffs of up to 15% within 150 days) and Section 301 of the Trade Act (which addresses unfair trade practices). Meanwhile, with the November midterm elections approaching, calls to correct the excessive strength of the dollar, which have been intensifying since last summer, are likely to strengthen further.