“In October, the Ministry of Strategy and Finance
: ▸ Stably designed a major exchange rate and investment deal with the United States;
▸ Expanded financial resources for ‘AI and green growth’ through the IMF, World Bank, and KGID;
▸ Simultaneously managed domestic prices and international solidarity through fuel taxes and ODA.”
1. Korea-US Foreign Exchange Agreement: "A Deal That Increases Transparency and Protects Confidence in Exchange Rates"
On October 1,
the Ministry of Strategy and Finance and the U.S. Treasury Department
Reaffirming the principle of not using each other's exchange rate as a means of export competitiveness,
The agreement announced that foreign exchange market intervention will be limited to alleviating excessive volatility . Reuters
Korea to the United States
Provides monthly intervention history data ,
KED Global also decided to disclose its annual currency composition (the proportion of foreign currency held).
This agreement aims to achieve two goals simultaneously: avoiding a currency war and establishing a trustworthy alliance.
“A promise that the government will not manipulate the exchange rate at will, but
will manage it transparently in accordance with international standards (IMF provisions) ” Reuters
This is at the same time
To preemptively block the US's 'Korea currency manipulation country controversy' ,
It will serve as a mechanism to create an environment of trust in future tariff negotiations and investment deals (a $350 billion strategic investment package) .
2. "Verbal Intervention" During the Won/Dollar Rise - A Signal Sent to the Market
On October 13 , as the won-dollar exchange rate soared to 1,434 won during the day,
foreign exchange authorities (Ministry of Strategy and Finance's International Finance Bureau and Bank of Korea's International Bureau) issued a joint text message urging them to "keep an eye on one-way movements" and intervene verbally . (Xinhua)
A kind of backstop that “leaves it to the market,
but the government clearly signals signs of crisis .”
This measure
It is also consistent with the agreement with the United States on the principle of "intervention only in cases of excessive volatility," according to Reuters .
It is a message of stability to domestic households, businesses, and foreign investors
that “we will not allow the won to plummet.”
3. Fuel Tax Adjustment: A Strategy that Simultaneously Monitors Inflation, Finance, and International Energy Prices
On October 22,
the government extended the fuel tax cut (fuel tax 'discount') until the end of December.
Gasoline: Tax reduction reduced from 10% to 7%
Diesel and LPG: Announced reduction from 15% to 10% . Reuters
"International oil prices and inflation remain a significant burden, but
fiscal soundness is no longer something we can ignore ."
We will not suddenly increase the burden of gas prices on ordinary citizens and the self-employed.
While gradually recovering tax revenues
Adjustment to induce a change in energy consumption structure (saving/conversion) .
"The fuel tax is not a 'permanent subsidy' that can be cut indefinitely. We are
monitoring international oil prices, inflation, and fiscal conditions together, and
adjusting toward 'smoothing inflation and gradually normalizing fiscal conditions.'"
4. IMF, World Bank, and G20: 'AI Transformation + Hyper-Innovation Economy' on the International Stage
October 17, Washington, DC – IMFC Meeting
Deputy Prime Minister and Minister of Strategy and Finance (Koo Yoon-chul) presented Korea's AI Transformation & Ultra-Innovative Economy strategy amid high debt, low growth, and geopolitical risks at
the IMF International Monetary and Financial Committee (IMFC) meeting . Ministry of Economy website
In the IMF
Sophisticated analysis of the impact of major country policies (especially trade and digital)
Request for strengthened customized policy recommendations for each member country. Ministry of Economy
At the G20 Finance Ministers and Central Bank Governors Meeting during the same period ,
AI Transformation and Hyper-Innovation Economy,
Multi-Development Bank (MDB) reform,
The Ministry of Economy emphasizes the importance of blended finance, which attracts private capital.
“This month, Korea simultaneously explained to the IMF, the World Bank, and credit rating agencies (Fitch) that it is not simply an ‘export-dependent manufacturing country,’ but
a country that is changing its growth pattern through AI, semiconductors,
SMR, and green hydrogen.” Ministry of Economy
5. KGID·ODA: Strengthening the image of a leading donor for "green and digital development."
October 20-22, Washington, DC – Korea Green Innovation Days (KGID) 2025
With the theme “Green Growth: The Path to Sustainable Jobs”
Jointly hosted by the World Bank, KGGTF, and the Ministry of Strategy and Finance.
Approximately 350 people participated, including 45 Korean organizations and 7 partner governments.
KGID is
Based on the Korea Green Growth Trust Fund (KGGTF) in which Korea contributed
A forum for discussing cooperation
on green infrastructure,
digital and AI-based green jobs, and urban, water, and energy projects for developing countries . wbgkggtf.org
The government has already decided to increase the 2025 ODA budget by 8.5% to 6.8 trillion won (approximately 4.9 billion dollars) .
The Korea Times has announced a policy of focusing support on the "green, digital, and health" sectors.
“Official development assistance (ODA) to developing countries
is a conduit for Korean companies and technologies to enter the global market, and
at the same time , it is a means for Korea to build its brand as a ‘responsible middle power .’”
1. United States
① Exchange Rate and Foreign Exchange Transparency Agreement
Has Korea stepped aside from the currency manipulation controversy ?
Monthly engagement data provides a snapshot of the level of trust between South Korea and the U.S. Reuters
② $350 billion US strategic investment package and tariff deal
How the pace of investment implementation and financing methods affect
U.S. financial stability, dollar demand, and U.S. jobs . (New York Post )
“Korea will keep its promise not to use the exchange rate for political purposes
, while at the same time making long-term investments in the United States at a reasonable pace and structure .”
“In this process , we must emphasize that Korea has the ability to manage its foreign exchange reserves, finances, and growth without crisis.”
2. IMF, World Bank, and international financial markets
① Korea's fiscal, debt, and growth strategies
Is it sustainable amidst an aging population, low growth, and high interest rates? Bank of Korea
② Through expansion of KGID, KGGTF, and ODA
How Korea is expanding its role as a "knowledge + finance partner" for green and digital development . wbgkggtf.org
“Korea is pursuing a dual strategy
: internally, transforming its growth structure through AI and an ultra-innovative economy, and
externally, assisting developing countries through green and digital ODA .”
3. Developing and emerging country partners
Through KGID, KGGTF, and ODA expansion
What kind of support can I receive for climate, energy, city, and digital projects ?
How can Korea's experience (high growth, digital government, green transition) be transferred to concrete projects ? wbgkggtf.org
As a country that has experienced the IMF crisis (1997), rapid growth, and digital transformation, Korea
is ready to share its expertise in the "overcoming crisis + growth + green transition" package.
4. Domestic citizens and markets (companies, households, and investors)
An intuitive explanation of how exchange rates, interest rates, oil prices, and inflation
affect the cost of living, exports, and investment .
especially
Won/dollar exchange rate in the 1400 won range,
Partial refund of fuel tax,
With exports recovering (October exports up 3.6%, semiconductors and shipbuilding booming), Reuters is concerned about "how proactively
the government is managing risks ."
“During the month of October, the government
▸ built trust through verbal intervention and a Korea-US agreement to address the sharp rise in the exchange rate ,
▸ maintained a buffer on fuel taxes while gradually normalizing finances , and ▸ explained the AI and green growth national strategy
on the international stage (IMF, World Bank, KGID) .”
1) Korean perspective
"In October, the Ministry of Strategy and Finance
maintained stable exchange rates, oil prices, and inflation.
Through cooperation with the IMF, World Bank, and the United States, we laid the foundation for transforming
'AI and Green Growth' and the $350 billion strategic investment deal into opportunities for the Korean economy."
2) National interest perspective
" The
core role of the Ministry of Strategy and Finance's International Cooperation Policy Communication Briefing is to simultaneously send signals of exchange rate transparency and long-term investment to the United States, AI, the hyper-innovative economy, and green ODA strategies
to the IMF and World Bank, Korea's experience in overcoming crises and green growth to developing countries, and stability in exchange rates, prices, and growth to the Korean people."
