Stock Market Impact: Bank of America notes that the Korean won may face downward pressure, which could weigh on equity markets and increase volatility in the Korean stock market.
Listed Companies and Sectors: The weakness is linked to semiconductor export‑driven current‑account surplus, indicating that semiconductor exporters may remain strong, but currency‑related earnings could be pressured.
Investment Flows: Portfolio outflows, foreign equity sell‑offs, hedging demand and National Pension Service allocation decisions are expected to offset the surplus, making capital flows the dominant driver of the won.
Interest Rates, Inflation, and Liquidity: The Bank of Korea is expected to keep policy rates unchanged but with a more hawkish bias as oil‑linked inflation and foreign‑exchange pass‑through rise, suggesting tighter monetary conditions.
Fiscal or Monetary Policy: Election‑related fiscal dynamics may tilt toward pro‑growth measures; a disciplined mix of hawkish monetary policy and contained fiscal expansion would support the won, whereas looser policy could deepen downside pressures.
