Won-dollar exchange rate closes at 1,368.6 won, lowest in more than 13 months

The won strengthened to 1,368.6 against the dollar on Aug. 31, marking its lowest weekly trading-session close in more than 13 months. The rate fell 3.9 won from the previous session in Seoul.

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From the perspective of price stability, one of our mandates, the relevant indicators are more concerning.

The move came despite hawkish comments from Federal Reserve Chair Kevin Warsh at the Jackson Hole Economic Policy Symposium in Wyoming. Warsh said inflation indicators were more concerning from the perspective of the Fed’s price-stability mandate. He described the 2% inflation target as firm and said the central bank needed confidence that underlying inflation was moving clearly and quickly enough toward that goal.

The dollar index, which measures the U.S. currency against six major currencies, stood at 99.62 at 3:28 p.m., down from 99.70 in the previous session. Market expectations of dollar-selling flows helped pull the won-dollar rate lower, the report said.

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The 2% inflation target is a firm target. We must have confidence that underlying inflation is moving clearly and at a sufficient pace toward the target. Otherwise, we have work to do. That is our mission and responsibility.

The market also faced concerns about a possible gap in dollar supply after selling related to SK hynix American depositary receipts was exhausted and the interim corporate tax payment period ended. However, late dollar selling by exporters was expected to restrict any rise in the exchange rate. Min Kyung-won, a researcher at Woori Bank, said exporter selling would continue to enter the market and reduce upward pressure on the dollar.

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Exporter selling is likely to continue entering the market and reduce upward pressure on the exchange rate.