Won value dropped 2.1% since July... Foreigners withdrew 3 billion USD in stock funds

Bank of Korea 'International Finance and Foreign Exchange Market Trends Since July 2021'

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] Amid the recent strengthening of the US dollar due to the spread of the COVID-19 Delta variant and the possibility of tapering (reduction of asset purchases) in the United States, South Korea's exchange rate volatility increased last month.

According to the "International Financial and Foreign Exchange Market Trends since July 2021" report released by the Bank of Korea on the 12th, the average daily fluctuation of the KRW-USD exchange rate last month was 4.3 won. This is an increase from the average fluctuation of 3.5 won in June, with the volatility rate rising from 0.31% to 0.38% during the same period.

According to the Bank of Korea's findings, South Korea's exchange rate volatility was the second highest among the top 10 countries, following Brazil (0.88%).

From July 1 to August 10, the value of the Korean won fell by 2.1% against the US dollar. The degree of currency depreciation was the third largest, following Brazil (4.3%) and South Africa (3.3%). As of the 10th, the KRW-USD exchange rate stood at 1,149.8 won, rising more than 20 won compared to the end of June (1,126.1 won).

On the same day, the KRW-USD exchange rate hit a new intraday high. As of 11:27 AM, the exchange rate was 1,159 won, marking the highest intraday level this year. Previously, the KRW-USD exchange rate had risen to 1,157.3 won intraday on the 28th of last month.

Meanwhile, foreign investors' net inflow into domestic securities decreased in July. While $8.32 billion flowed in during June, only $2.51 billion was recorded in July. Due to the spread of the Delta variant and other factors, stock funds saw an increased net outflow, with foreigners withdrawing $3.06 billion. Bond funds continued to see net inflows centered on public funds, but the inflow amount shrank from $8.76 billion in June to $5.57 billion last month.

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