[Dasan Column] The Warning Sent by the High Exchange Rate (January 19, 2026)

Finding decent employment in Korea may become increasingly difficult. Although Korea must be made into an attractive destination for investment, productivity must be raised, and the labor and welfare systems must be reformed for long-term sustainability, talk remains abundant while action is scarce. There are frequent occasions to worry whether the country may in fact be moving in the opposite direction. The fact that the exchange rate has hardened to crisis levels even in the absence of any notable external shock is the cumulative result of these anxiety-inducing factors piling up one upon another.

Economics has a concept known as "voting with one's feet"—the phenomenon whereby people migrate to the location that best suits their preferences regarding public services, taxation, and the like. In that light, the growing ranks of Korean retail investors channeling their money into overseas equities are a signal that should not be taken lightly. Korean individual investors made net purchases of US equities totaling $32.6 billion (approximately 48 trillion won) last year, more than three times the figure of $10.545 billion recorded in 2024. Conversely, they net sold 26.36 trillion won worth of shares on the domestic securities market. This pattern of individual investors buying US equities while selling domestic equities has continued into the current year as well.

It is a shortsighted view to scapegoat these retail investors in foreign markets as the primary culprits behind the high exchange rate. The core of the problem lies in the decline of Korea's growth potential. Unless this is addressed, even the aspiration of "KOSPI 5,000" may vanish like a mirage. That is precisely the warning being sent by the high exchange rate.

https://n.news.naver.com/article/015/0005238746?sid=110