Authorities Powerless to Intervene... Exchange Rate Opening Price Hits Highest in 1.5 Years

Exchange Rate Opens at 1,204 Won

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] The won-dollar exchange rate is rising sharply following indications of early tightening by the U.S. Federal Reserve (Fed).

On the 7th, in the Seoul foreign exchange market, the won-dollar exchange rate opened at 1204.2 won, up 3.2 won from the previous day, and is currently fluctuating slightly around 1202 won. This is the first time since July 17, 2020 (1205 won) that the opening rate has exceeded 1204 won.

As the Fed's early tightening becomes more apparent, the dollar is expected to remain strong. In fact, despite verbal intervention remarks from authorities the previous day, the exchange rate rose even further compared to the day before.

Lee Eokwon, Vice Minister of Strategy and Finance, stated at the regular briefing of the Emergency Economic Central Disaster and Safety Countermeasures Headquarters on the 6th, "If there is a rapid increase in volatility of the won-dollar exchange rate, we will strengthen efforts to stabilize the market."

Oh Changseop, a researcher at Hyundai Motor Securities, said, "Intervention by authorities may have some effect in easing exchange rate volatility," but added, "Given that the Fed has even hinted at reducing its asset size, the dollar's strength is expected to continue."

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