Even if the US designates South Korea a currency manipulator, it won't lead to a significant appreciation of the won's value, a private think tank here said Saturday.

The Woori Finance Research Institute questioned the effectiveness of the possible measure by the Donald Trump administration eager to reduce the US trade deficit.

The Treasury Department included South Korea, a key US ally and trade partner, on the currency watch list last year, along with China, Japan, Germany, Taiwan and Switzerland.

It is scheduled to update the list in April for a report to Congress on its foreign exchange policy amid concern here that Washington may adjust the relevant criteria and label Seoul a currency manipulator.

It may serve as a "factor for the won to appreciate but fundamental elements like the timing of the US interest rate hikes will likely have bigger effects on the direction of the won-dollar rate," the institute said in a report.

Chances are high that the won will weaken if the US speeds up its rate increases and France takes concrete steps to leave the European Union, it added.

A number of American think tanks are also opposed to the expansion of the current manipulator blacklist, saying it would have no substantive effects only by deepening trade conflicts.

But Song Gyeong-hee, a senior researcher at the Woori institute, did not rule out the possibility that Trump will made good on his presidential campaign pledge to push for the listing of China as a currency manipulator, a decision that may affect South Korea as well.

The Trump government is expected to gain the upper hand in negotiations with major trade partners by threatening to designate them currency manipulators, added Song.

The won finished this week's trade at 1,157.40 against the greenback. (Yonhap)