US, South Korea agree not to target FX rates for trade advantage

Core Points - The United States and South Korea agreed that foreign exchange interventions should be reserved for combating excessive volatility, without targeting exchange rates for competitive purposes [1][3][6] - The agreement aligns with a similar one made between the U.S. and Japan, but does not include a bilateral currency swap line requested by South Korea [2][4] - South Korea emphasized the importance of monitoring currency market stability, a point not included in Japan's agreement [4] Summary by Sections Foreign Exchange Interventions - The joint statement specifies that market intervention should only be used to address excessive volatility and disorderly movements in exchange rates [6] - Both countries reaffirmed their commitment under the IMF Articles of Agreement to avoid manipulating exchange rates for competitive advantages [3] Bilateral Relations - The agreement does not include a bilateral currency swap line, which South Korea sought to manage the foreign exchange implications of a $350 billion investment package [2] - South Korea will share its market intervention operations with the U.S. on a monthly basis, with public disclosures occurring quarterly [6] National Pension Service Concerns - The statement did not explicitly mention South Korea's National Pension Service (NPS), which has raised concerns regarding its foreign asset increases and potential currency intervention implications [5]