KRW strengthens on strong GDP growth and Bank of Korea tightening expectations amid a 35% KOSPI decline in July.
The South Korean Won (KRW) climbed 6.5% against the USD in July, nearing four-month highs despite a sharp selloff in the KOSPI Index. Strong macroeconomic data, including 0.6% GDP growth in Q2 and 3.2% inflation in June, fueled expectations of further monetary tightening by the Bank of Korea.
The KOSPI Index fell 6.4% to 5,638, extending July losses to 35%, driven by concerns over AI-related tech stock overinvestment. Authorities halted trading twice this week after declines exceeded 10% on consecutive days, prompting pledges for new stabilization measures.
Finance Minister Koo Yun-cheol announced plans to regulate single-stock leveraged ETFs to curb volatility. Despite the equity rout, the KRW’s resilience reflects confidence in the central bank’s policy stance.