Secretary of the Treasury Janet Yellen went on a two-day trip to Seoul, South Korea where she met with the President of South Korea Yoon Suk-yeol, Finance Minister Choo Kyung-ho, Governor of the central bank Rhee Chang-yong, and had a private discussion with the LG Chem CEO Shin Hak-cheol.
What Was Discussed: On Tuesday, Yellen and Finance Minister Choo discussed stabilizing the volatile foreign exchange market, although avoided speaking about potential currency swaps, according to the Korea JoongAng Daily.
According to Trading Economics, the Korean Won has reached a 13-year low, as the Won continues to fall against the strong U.S. dollar.
The Korea JoongAng Daily reported that the issues in the currency market were discussed in-depth and both agreed on implementing cooperative actions to provide liquidity agreements if necessary.
Friend-Shoring: When speaking at the LG Group research facility on Tuesday, Yellen expressed the importance of trading more closely with U.S. allies and less with geopolitical rivals, as stated in the Wall Street Journal.
Yellen expressed in the Journal report that “friend-shoring” is about diversifying our supply chains and lowering economic risk, especially in times of crisis.
At the LG facility, Yellen discussed China’s unfair trade practices in the semiconductor industry, as China is using its market position and access to raw material as geopolitical leverage, mentioned in the Wall Street Journal.
When speaking at the LG Chem battery subsidiary with CEO Hak-cheol, Yellen asked about battery recyclability, as well as the amount of lithium and anode materials needed.
What Else: Yellen also discussed Russia’s leverage over global energy and food supplies, further stressing why it is essential to trade more closely with our allies.
South Korea’s last currency swap with the U.S. was from March 2020 to the last day of 2021.
Photo: Courtesy of International Monetary Fund on Flickr
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