Increased FX market volatility picked as S. Korea's biggest systemic risk: survey

Xinhua
23 Jan 2026, 09:15 GMT+10

SEOUL, Jan. 23 (Xinhua) -- An increased volatility in the foreign exchange (FX) market was picked as the biggest systemic risk facing the South Korean economy, a central bank survey showed Friday.

According to the Bank of Korea (BOK) survey of 75 domestic and foreign financial sector professionals and economic experts conducted between November and December last year, 26.7 percent of the respondents selected the heightened exchange rate fluctuations as the biggest systemic risk.

The South Korean won versus the U.S. dollar exchange rate hovered above 1,400 won per dollar since last October, driven by the U.S. tariffs imposition, geopolitical risks in the Middle East and Europe, and significant capital outflows coming from surging overseas stock investment by retail investors.

The FX volatility was followed by massive household debt with 16 percent, housing market instability in the Seoul metropolitan area with 6.7 percent and the sluggish domestic economy with 6.7 percent.

The experts forecast that risks such as the widened FX volatility, uncertainties in the monetary and economic policies of major economies and the possible price adjustments in global asset markets could materialize within a year.

Risks, including massive household debt, stagnant domestic demand and real estate market instability in the capital area, were expected to become more prominent within one to three years.

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