Bank of Korea Governor Shin Hyun-song said South Korea would not raise interest rates simply because the United States does, saying policy would respond to domestic exchange rates, inflation, financial markets and vulnerabilities rather than interest-rate differentials. His comments followed Federal Reserve Chair Kevin Warsh’s Jackson Hole keynote, where Warsh said policymakers must be confident underlying inflation is moving clearly and fast enough toward target and that more work is needed if it is not. U.S. PCE inflation remains above the 2% goal and July CPI was 3.4%, prompting CME FedWatch September hike odds to rise from about 35% to roughly 60%; the U.S. two-year yield reached around 4.35% and the dollar strengthened. The won traded around 1,374 per dollar, its strongest level since July 2025, while its Aug. 28 weekly close was 1,372.5, the lowest in about 13 months, supported by exporter dollar sales, month-end flows, semiconductor exports and the Bank of Korea’s back-to-back hikes, which lifted its policy rate to 3%. August shipments were forecast to rise more than 60% year-on-year and the trade surplus to exceed $30 billion, while the central bank raised its growth forecast to 3.3% from 2.6%, described in the newer account as its 2026 forecast. Shin said annual U.S. investment of up to $20 billion under a $200 billion cap is manageable against about $427 billion in July reserves, urged preemptive action as housing prices and household debt rise, and said the K-dot plot will be reviewed after one year.