Foreign Exchange Authorities Inject $13.6 Billion in Q1 to Stabilize Exchange Rate

As the won-dollar exchange rate has recently been fluctuating around the 1500 won mark, foreign exchange authorities have implemented measures to lower the rate by selling large amounts of dollars into the market. In the first quarter of this year, foreign exchange authorities net sold a total of $13.628 billion into the market, using their reserves to defend the currency when the rate surged.

As a result of the net dollar sales, South Korea's foreign exchange reserves stood at $427.0 billion as of the end of May 2026, a slight decrease compared to April.

External factors driving dollar strength persist, and analyses suggest that the authorities' capacity for market intervention could become strained due to large net dollar sales for six consecutive quarters. It has been assessed that the government and the Bank of Korea need to develop macroeconomic stabilization policies and long-term capital inflow measures to resolve the foreign exchange market's supply-demand imbalance, rather than solely focusing on defending the exchange rate.