Barclays Constructive On KRW

"We expect the KRW to stay supported in the short run with its high beta to CNH and JPY; we look for a potentially faster-than-expected recovery in China growth to lift CNH, and for downside risks to our USDJPY forecasts on BoJ policy changes. Tailwinds from record FX deposits and portfolio inflows could lower USDKRW in Q1; officials' determination to open capital markets and potential inclusion to key global indices could set a foundation for sustained structural inflows. This poses downside risks to our USDKRW forecasts (1230 at end-2023).

We look for KRW outperformance against its forwards in the near term, before headwinds in the medium term from dividend repatriation outflows, weak terms of trade and a BoK that's more defensive on KRW appreciation as the government focus shifts to exports from inflation. We continue to expect KRW's outperformance against TWD."