Korea-US trade agreement stimulates demand for the US dollar. South Korea raises annual limit on issuance of foreign exchange stabilization bonds.

South Korea has raised the annual limit for the issuance of Foreign Exchange Stabilization Bonds to more than three times the original plan to cope with the surge in demand for US dollars following the trade agreement reached between South Korea and the United States. The annual budget approved by the National Assembly on Tuesday night showed that the issuance limit for Foreign Exchange Stabilization Bonds in 2026 has been raised to $5 billion, compared to the government's previous proposal of $1.4 billion. The limit for 2025 is $3.5 billion. Under the South Korea-US trade agreement, South Korea has committed to investing $350 billion in the United States, while the United States has agreed to set the annual investment limit from South Korea to the US at $20 billion. Officials said the funds will be raised through the issuance of government-guaranteed bonds overseas and income from managing foreign exchange reserves. A spokesperson for South Korea's Ministry of Planning and Finance declined to comment on this.