Won-Dollar Exchange Rate Closes at 1,214.3 Won, Down 21.4 Won... "Excessive Rise Reversal" (Comprehensive)

Largest Decline in Two Years

On the 17th, a dealer at the Hana Bank dealing room in Euljiro, Seoul, is watching news about the 0.25%p increase in the US Federal Reserve's benchmark interest rate. Photo by Moon Honam munonam@

[Asia Economy Reporter Seo So-jung] The result of the Federal Open Market Committee (FOMC) meeting of the U.S. Federal Reserve (Fed) met expectations, resolving uncertainties and causing the won-dollar exchange rate to fall to the 1,210 won level.

On the 17th, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,214.3 won, down 21.4 won from the previous day's closing price. This is the first time in about two years since March 27, 2020, that the decline exceeded 20 won.

On that day, the exchange rate fluctuated in the mid-to-late 1,220 won range in the morning and widened the decline in the afternoon, closing at the 1,210 won level.

Overnight, the Fed decided to raise the benchmark interest rate by 0.25 percentage points to 0.25?0.50%. This is the first rate hike in 3 years and 3 months. Since the U.S. FOMC result did not significantly deviate from market expectations, risk asset preference sentiment recovered. Expectations for negotiations between Russia and Ukraine eased market fears.

Before the market opened, the government's message to stabilize the foreign exchange market also had an impact. Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said at the Emergency Economic Central Countermeasures Headquarters meeting held at the Government Seoul Office in the morning, "If the speed of the exchange rate rise is judged to be excessive, efforts to stabilize the market will be further strengthened."

Oh Chang-seop, a researcher at Hyundai Motor Securities, said, "The uncertainty of the U.S. FOMC was resolved, and the exchange rate fell as supply and demand conditions were reflected, such as foreigners recording net purchases in the stock market," adding, "The authorities hinted at the possibility of intervention, which affected the exchange rate." Researcher Oh added, "It is a correction following excessive rise so far," and "The dollar's strong trend will continue for the time being, but it may change depending on the results of negotiations between Russia and Ukraine."

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