The Bank of Korea is talking the talk. Its pledge to quit intervening in the foreign currency markets will be music to the ears of US politicians weary of Asian mercantilism. It also makes domestic sense.

South Korea's $206bn of foreign reserves are among the highest in the world, and comfortably cover 10 months' imports or its entire foreign debt. That is far more than normal caution dictates. Reserve accumulation, much of which is in low-yielding US assets, also carries a cost, since sterilisation means paying higher domestic interest rates.