Soaring Exchange Rate Closes at 1227.1 Won... Highest in 1 Year and 9 Months

On the 7th, the KOSPI index opened at 2,680.17, down 33.26 points (1.23%) from the previous session, as employees were working in the dealing room of Hana Bank in Jung-gu, Seoul. The won-dollar exchange rate started at 1,219.0 won, up 4.8 won from the previous session, surpassing 1,220 won intraday for the first time in 1 year and 9 months. Photo by Hyunmin Kim kimhyun81@

As the Ukraine crisis prolongs, the won-dollar exchange rate surged on the 7th, surpassing the 1,220 won mark per dollar.

According to the Seoul foreign exchange market on that day, the won-to-dollar exchange rate closed at 1,227.1 won, up 12.9 won from the previous trading day's closing price.

This is the first time in 1 year and 9 months since June 2, 2020 (1,225.4 won) that the exchange rate has exceeded 1,220 won at closing.

The exchange rate opened at 1,219.0 won, up 4.8 won that day. It then immediately rose above 1,220 won and continued its upward trend, but the additional rise stopped in the mid-to-late 1,220 won range.

The prolonged Russian invasion of Ukraine is interpreted as increasing the preference for safe-haven assets, which is driving up the exchange rate.

According to AFP, Russian President Vladimir Putin stated in a phone call with French President Emmanuel Macron that "whether through negotiations or war, we will achieve our objectives in Ukraine."

The sharp rise in international oil prices is also fueling market anxiety. On that day, West Texas Intermediate (WTI) crude oil for April delivery on the New York Mercantile Exchange (NYMEX) briefly rose to $130.4 per barrel. This is the highest level in over 13 years since July 2008.

U.S. Secretary of State Tony Blinken's announcement that he is considering a ban on Russian oil imports along with European allies influenced the surge in oil prices.

However, as the exchange rate approached the 1,230 won per dollar level, dollar selling by exporters curbed further upward momentum in the exchange rate.

Market forecasts suggest that the exchange rate will continue to rise for the time being, as the dollar is strengthening due to the Ukraine crisis.

When the won-dollar 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.