Bank of America Sees Korean Won Slumping to Multi-Year Lows by End-2025

Key Moments

Portfolio Outflows Drive Persistent Won Weakness

Investing.com — The Korean Won is set to close 2025 at its weakest level since 2012, according to Bank of America. Ongoing portfolio outflows remain the main source of pressure.

Although Korean officials have stepped up verbal efforts to support the Won, the currency continues to slide. As a result, USD/KRW is moving closer to the 1,480 level. Bank of America identifies rising net portfolio outflows as the key driver behind the decline.

Retail Demand for U.S. Equities Intensifies

According to Bank of America, Korean retail investors sharply increased purchases of U.S. equities starting in September 2025. Notably, this surge coincided with the latest phase of Won depreciation.

As capital shifted into U.S. assets, pressure on the Won intensified. Consequently, these flows reinforced broader outflow trends from domestic financial markets.

NEER Signals Broad-Based Currency Weakness

Beyond the bilateral exchange rate, the report highlights the Korea NEER. This index tracks the Won against a basket of global currencies.

Bank of America expects the NEER to fall to its lowest level in 13 years by the end of 2025. Therefore, the weakness appears broad-based rather than limited to USD/KRW.

Bank of America Flags 2025 as a Year of Outflows

Bank of America describes 2025 as “the year of portfolio outflows and Won weakness.” Despite official support measures, capital flight continues to dominate currency dynamics.

Ultimately, the bank argues that the scale and persistence of these flows outweigh intervention efforts. As long as outflows continue, pressure on the Won is likely to persist.