Exchange Rate Rise Limited Despite North Korea Issues... Won-Dollar Rate Closes at 1213.9 Won

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] On the 17th, the won-dollar exchange rate closed at 1,213.9 won, up 6.7 won from the previous day in the Seoul foreign exchange market.

The won-dollar exchange rate started at 1,212.0 won, up 4.8 won, and surpassed 1,218 won around 10:30 a.m., but showed signs of stabilization in the afternoon, reducing the extent of the rise.

Following North Korea's demolition of the Kaesong Inter-Korean Joint Liaison Office the previous afternoon, tensions remained as it announced on the morning of the same day that it would redeploy military units to the Mount Kumgang tourism zone, Kaesong Industrial Complex, and guard posts (GP) within the Demilitarized Zone (DMZ), but the rise was limited.

Major U.S. economic indicators, including May retail sales, exceeded market expectations, and growing optimism about economic recovery also contributed to limiting the rise in the exchange rate. The fact that North Korea's provocations were partially anticipated in advance and the authorities' vigilance regarding the exchange rate rise also had an impact.

On the same day, the government and the Bank of Korea, after reviewing the impact on the financial and foreign exchange markets, analyzed that the market impact due to the North Korea issue was limited.

The government held a meeting of related ministers (Green Room Meeting) at the Government Seoul Office, chaired by Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki, to review international financial market trends following the demolition of the Inter-Korean Joint Liaison Office. The Bank of Korea also held a 'Monetary and Financial Countermeasures Meeting' chaired by Deputy Governor Yoon Myeon-sik on the same day. The Bank of Korea stated, "In the current situation where concerns about the resurgence of COVID-19 remain, market volatility may further increase depending on the development of North Korean risks," and added, "We plan to closely monitor market conditions."

This content was produced with the assistance of AI translation services.