The Won-Dollar Exchange Rate Surpasses 1,210 Won for the First Time in 1 Year and 9 Months... Rising Pressure Expands

On the 3rd (local time), a drone captured photos of an apartment in a residential area of Borodianka, on the outskirts of Kyiv, the capital of Ukraine, completely devastated by Russian military bombing.
[Image source=Yonhap News]

The won-dollar exchange rate surpassed 1,210 won during trading hours. This is the first time in 1 year and 9 months since June 2020. As the Ukraine crisis prolongs, there are forecasts that the pressure on the exchange rate to rise will continue for the time being.

In the Seoul foreign exchange market, as of 10 a.m. on the 4th, the won-dollar exchange rate is trading at 1,211.5 won per dollar, up 6.9 won from the previous day's closing price. On that day, the won-dollar exchange rate opened at 1,208 won, up 3.4 won from the previous day. The exchange rate breaking through the 1,210 won level during trading hours is the first time in about 1 year and 9 months since June 23, 2020.

The prolonged Russian invasion of Ukraine has increased the preference for safe-haven assets, which is analyzed to be driving up the exchange rate. The won-dollar exchange rate rose sharply in the early trading hours, reaching a high of 1,212.7 won, then fluctuated in the low 1,210 won range.

Ukraine and Russia held a second round of talks overnight in Belarus and agreed on a temporary ceasefire and the creation of humanitarian corridors for civilian evacuation, but failed to resolve the conflict. According to major foreign media, a fire broke out at the Ukrainian Zaporizhzhia nuclear power plant due to an attack by Russian forces in the early morning hours.

If the Ukraine crisis continues, the pressure for the won-dollar exchange rate to rise is expected to increase further. Recent interest rate hike remarks by Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), have clearly shown won weakness. As the exchange rate rises, the prices of imported raw materials and parts converted into won increase, which can lead to domestic inflation.

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