Won-Dollar Exchange Rate Surpasses 1,350 Won for the First Time in 13 Years and 4 Months... Hits Another Record High (Comprehensive)

On the morning of the 29th, the USD/KRW exchange rate is displayed on the status board in the dealing room of the Hana Bank headquarters in Euljiro, Jung-gu, Seoul. [Image source=Yonhap News]

The won-dollar exchange rate surpassed 1,350 won intraday for the first time in 13 years and 4 months.

As of 1:50 p.m. that day, the won-to-dollar exchange rate in the Seoul foreign exchange market was at 1,350 won. The rate started the day at 1,342.5 won, up 11.2 won, and broke through 1,350 won at 12:25 p.m.

This is the first time the exchange rate has exceeded 1,350 won since April 29, 2009 (high of 1,357.5 won). After breaking through the 1,340 won level for the first time in 13 years and 4 months last week and continuing its upward trend, the rate slightly declined due to weak economic indicators from the U.S. and Europe, but surged again following the Jackson Hole meeting as the strong dollar phenomenon intensified.

The surge in the exchange rate that day was due to Federal Reserve (Fed) Chair Jerome Powell’s hawkish remarks at the economic policy symposium (Jackson Hole Meeting) held on the 26th (local time) in Jackson Hole, Wyoming, USA.

Chair Powell said, "A single improvement in inflation indicators is far from enough to be confident that inflation has come down," adding, "This is not a point to stop or take a break." Following this, the dollar index rose to around 109.30 at 9:30 p.m. on the 28th (local time), reaching its highest level in 20 years and 2 months since June 19, 2002 (closing price 109.63).

With the likelihood increasing that the Fed will implement a 'giant step' by raising the policy rate by 0.75 percentage points at once next month, the dollar’s strength is expected to intensify further.

The government issued verbal intervention remarks in response to the rapid rise in the exchange rate that day, but it appears insufficient to stop the upward trend.

Bang Ki-seon, First Vice Minister of Strategy and Finance, held a market situation review meeting at the Export-Import Bank of Korea in Seoul with the relevant departments of the Ministry of Strategy and Finance and the International Finance Center participating, stating, "We will strengthen policy efforts to stabilize the market in preparation for excessive market concentration phenomena."

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