Won-Dollar Exchange Rate Surpasses 1250 Won Intraday... "Highest in Over 2 Years"

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jeong] The won-dollar exchange rate hit a new high, surpassing 1,250 won during trading hours.

On the 25th, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,249.9 won, up 10.8 won from the previous trading day's closing price.

The exchange rate, which started the day at 1,243.5 won, rose to 1,250.1 won just before the market closed, marking a new high for two consecutive trading days. This is the highest level in 2 years and 1 month since March 24, 2020.

The strong dollar continues as the U.S. Federal Reserve (Fed) hinted at a 'big step' of raising the benchmark interest rate by 0.5 percentage points at once, and the Chinese yuan also showed weakness. The dollar index, which represents the value of the dollar against six major currencies, also rose to around 101.7.

As the exchange rate surged to the 1,250 won level during the day, questions arose at the press meeting with Lee Chang-yong, the new governor of the Bank of Korea, about whether adjusting the benchmark interest rate could defend against won depreciation.

In response, Governor Lee said, "The degree of won depreciation in January or February is similar to the level of increase in the dollar index," and added, "The depreciation of the won is not severe compared to other currencies such as the yen." He continued, "We will observe the impact of exchange rate movements on inflation, but it is not desirable policy to decide interest rates targeting the exchange rate."

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