South Korea and the United States are prioritizing the design and structure of Seoul’s $350 billion investment pledge over the idea of a currency swap, Finance Minister Koo Yun Cheol said in an interview with Bloomberg TV on Wednesday.
Koo told Bloomberg that officials in Washington, including U.S. Treasury Secretary Scott Bessent, are increasingly concerned about the potential for an “upfront” deployment of funds to trigger volatility in South Korea’s foreign-exchange market. “Secretary Bessent fully understands the difficulties in Korea’s FX market and is having internal discussions on how to respond to the situation,” Koo said.
The comments come just days before U.S. President Donald Trump’s visit to South Korea for the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, where he is expected to hold bilateral talks with South Korean President Lee Jae Myung and Chinese President Xi Jinping.
According to Koo, Seoul’s priority is to secure a balanced composition for the massive investment package, likely combining direct investments, loans, and guarantees. “Whether a currency swap is needed — and to what extent — will depend entirely on how the deal is structured. It may not be necessary at all, or it could be arranged on a smaller scale,” he explained.
The negotiations, ongoing since late July, have stretched for more than two months — longer than the $550 billion investment agreement recently signed between the U.S. and Japan. That deal, also reported by Bloomberg, contained clauses allowing Washington to raise tariffs if Tokyo failed to fund Trump-approved projects within 45 days.
By contrast, Seoul is seeking greater clarity and balance in its deal. The Bank of Korea has warned that any investment deployment above $20 billion annually could destabilize the won, which has recently weakened to around 1,432.55 per dollar — its softest level since 2009.
Koo noted that much of the won’s recent depreciation stems from market uncertainty surrounding the unfinished deal. “Once the tariff issue is resolved, that uncertainty will likely fade,” he said, adding that U.S. officials have not accused Seoul of intentionally weakening its currency.
Trade tensions remain a key sticking point. The U.S. maintains a 25% tariff on Korean cars, leaving Seoul’s automakers at a disadvantage compared to Japan, whose firms now face a reduced 15% rate. Koo said Korean negotiators have repeatedly raised this issue with Washington, but with little progress so far.
Beyond trade and foreign exchange, Koo emphasized South Korea’s long-term goal of transforming into an innovation-driven economy. He said the government is ramping up investments in artificial intelligence, deep-tech, and digital transformation to counter structural challenges like an aging population and rising debt levels.
Koo also confirmed that Seoul plans to introduce 24-hour won trading to enhance market access and support its bid for MSCI Developed Market inclusion. “We’re not simply expanding the budget — we’re concentrating spending on transformative technologies,” he said. “Even limited success could reduce our debt ratio.”
The government aims to finalize the U.S.-Korea investment agreement during next week’s APEC summit, with senior officials including Presidential Policy Chief Kim Yong-beom and Industry Minister Kim Jung-kwan already en route to Washington for final negotiations, Bloomberg reported.
