Image: Reuters

The won has jumped nearly 12% versus the dollar this year, set to deliver its biggest annual gain in more than ten years, as the Wall Street Journal reports Monday.

Despite rising tensions on the peninsula, improving economic growth and expectations of a weaker dollar have helped push the won up. Investors are also keenly aware of the central bank’s hesitance to slow the won’s rise.

South Korea’s central bank “has not been anywhere near as interventionist as it has in the past,” senior portfolio manager at Neuberger Berman Prashant Singh was quoted as saying. “This has been one of the primary drivers of the won’s strength.”

Some say the Trump administration’s hawkish trade rhetoric and threats of labeling South Korea a currency manipulator are behind this uncharacteristic approach. The bank itself doesn’t seem to disagree.

“It would not be true if we say we are not conscious of remaining on the list when we conduct smoothing operations,” a senior Bank of Korea official who supervises currency markets was quoted as saying in an interview.

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