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2025.12.0803:11:23UTC+00Won Strengthens on Budget Approval, Policy Optimism

On Monday, the South Korean won appreciated to approximately 1,467 per dollar, rebounding from its recent multi-month lows. This recovery was propelled by a positive shift in sentiment, driven by recent domestic developments. Finance Minister Koo Yun-cheol emphasized that, following the budget approval, government ministries are implementing strategies to bolster economic growth. Last week, the National Assembly sanctioned the 2026 government budget amounting to KRW 727.9 trillion, with allocations aimed at stimulating economic activity and enhancing national defense. Investor confidence was further buoyed by a joint statement from South Korean and Japanese business associations, pledging enhanced cooperation in areas such as artificial intelligence and semiconductors, alongside other shared structural priorities. Additionally, investors are positioning ahead of the Federal Reserve’s upcoming two-day policy meeting, with market expectations leaning towards a 0.25 percentage point reduction in the current funds rate of 3.75% to 4.0%.

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