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🇰🇷 South Korea /Economy & Trade

Strong Exports Push Won-Dollar Rate Into the 1,350s for the First Time in 14 Months

From Hankyoreh · () Korean

Translated from Korean and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources Context piece
  • The won strengthened against the dollar as exporters sold dollars, with the exchange rate closing at 1,359.3 won on the Seoul market.
  • The rate entered the 1,350-won range for the first time since July 3 of the previous year, helped by semiconductor exports and weaker foreign selling of South Korean stocks.
  • Analysts said the won could strengthen further as dollar supply grows, though global financial instability, the Middle East situation, overseas investment and U.S. midterm election uncertainty remain risks.

The won-dollar exchange rate has fallen into the 1,350-won range for the first time in 14 months, driven by continued dollar selling from South Korean exporters, particularly semiconductor companies.

A decline of about 200 won over the past two months is a rapid pace.

· Moon Jeong-heeThe KB Kookmin Bank analyst assessed the speed of the won’s recent strengthening.

The rate closed daytime trading in Seoul on the 3rd at 1,359.3 won per dollar, down 9.4 won from the previous session. It opened at 1,359.0 won and moved between the mid-to-high 1,350s and the low 1,360s. Based on the daytime closing rate, this was the first time it had reached the 1,350s since July 3 of the previous year, when it stood at 1,359.4 won.

KB Kookmin Bank senior analyst Moon Jeong-hee described the drop of about 200 won over the past two months as rapid. She said improving economic conditions and higher interest rates had contributed, but that better supply and demand conditions appeared to be the biggest factor. Strong exports have increased the supply of dollars, while foreign investors’ selling of South Korean shares, which had pushed the exchange rate higher, has weakened.

Economic conditions are improving and higher interest rates have played a role, but improved supply and demand appears to have been the biggest factor.

· Moon Jeong-heeShe identified the main forces behind the exchange-rate decline.

Moon cited the Bank of Korea’s forecast for a current-account surplus of $450 billion this year, noting that the first half had already produced $190 billion. That implies greater dollar supply in the second half, she said, although international financial instability, a worsening Middle East situation and overseas investment by South Koreans remain variables.

The decline is faster than expected.

· Kim Yu-miThe Kiwoom Securities researcher described the recent movement in the won.

Kim Yu-mi, a researcher at Kiwoom Securities, also called the decline faster than expected. She pointed to continued exporter selling and weaker expectations for a rise in the exchange rate. Kim said policy uncertainty surrounding the U.S. midterm elections in early November remained, and forecast the rate could return to the high 1,300s in a month and the low-to-mid 1,400s by year-end.

The rate could be in the high 1,300s in a month and the low-to-mid 1,400s toward the end of the year.

· Kim Yu-miShe gave a forecast while warning of remaining policy uncertainty.
About this summary

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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