A trader at Citigroup suggests that the recent weakness of the Korean won is likely temporary, with the currency expected to recover against the U.S. dollar by year-end, supported by the country's chip-driven economic growth.

In an interview on Wednesday evening, Citigroup's Korea trading head, Lee Sanghun, stated, "Due to external factors such as the Federal Reserve's hawkish stance and inflation concerns stemming from rising oil prices, there is a short-term risk of the won weakening past 1,400 per dollar. However, I do not believe the won will remain this weak for an extended period. Therefore, around the 1,400 level, it would be a favorable opportunity to sell dollars and buy won."

The Korean won had previously rallied for two months, making it Asia's best-performing currency. However, on Thursday, the won declined for a fourth consecutive session, touching a low of 1,388.25 per dollar. The Fed's hawkish policy is pressuring the won, as U.S. rate hikes widen the interest rate differential between the U.S. and Korea, potentially diminishing the appeal of local assets.

In early trading on Friday, the won opened steady, holding near 1,381.00 per dollar.