On the 20th, the won-dollar exchange rate falls below 1140 won intraday for the first time in 1 year and 6 months

[Asia Economy Reporter Kim Eunbyeol] On the 20th, the KRW-USD exchange rate fell below 1,140 won during the trading session. This is due to the continued strength of the Chinese yuan, marking the first time since April 23 of last year that the KRW-USD exchange rate dropped below 1,140 won intraday.

As of 10:08 a.m. in the Seoul foreign exchange market, the KRW-USD exchange rate was trading at 1,139.75 won per dollar. The rate opened at 1,140.5 won and then entered a downward trend.

The KRW-USD exchange rate fell below 1,140 won intraday on April 23 last year, hitting 1,139.4 won before rebounding to close at 1,141.80 won.

This year, the Korean won's value plummeted in March as the global financial markets were shaken by the spread of the novel coronavirus (COVID-19). On March 19, the KRW-USD exchange rate rose to 1,285.7 won at closing, threatening the 1,300 won mark. Since then, the exchange rate has declined thanks to the Korea-US currency swap agreement and the US quantitative easing measures.

Experts believe the recent strength of the Korean won is also related to the strength of the Chinese yuan. Recently, investors have been betting on the election of Joe Biden, the US Democratic candidate, which has strengthened the yuan. The People's Bank of China, the Chinese central bank, also set the yuan-dollar exchange rate at the lowest level in a year and a half, at around 6.70 yuan per dollar, the previous day.

China also announced its third-quarter gross domestic product (GDP) growth rate the previous day. China's GDP grew by 4.9% year-on-year. Although this was below market expectations, it remains the only country worldwide with a high growth rate, which has contributed to the yuan's strength.

The KRW-USD exchange rate is expected to continue its weakness for the time being. The yuan's strength is ongoing, and there are no special factors to prevent the exchange rate from falling. It appears that bargain hunters have also lowered their buying points below 1,140 won.

Meanwhile, although the exchange rate is weakening, it is not considered to be at a level that would negatively impact exports. On the 14th, Lee Ju-yeol, Governor of the Bank of Korea, stated at a monetary policy direction meeting, "The impact of the exchange rate on our country's exports is not greater than in the past," adding, "The domestic export structure has also become more advanced, and exports are more influenced by global demand and international trade conditions, especially recently by the COVID-19 situation, rather than the exchange rate."

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