[MarketING] Exchange Rate Plunges 15 Won to Close at 1274.0 Won Amid Interest Rate Hike Easing

KOSPI Closes Higher for 3 Consecutive Days... Recovers to 2590 Level
CELLTRION Trio Gains for 2 Days Straight on Merger Plans News

The KOSPI and KOSDAQ continued their upward trend for the third consecutive day. This is attributed to the easing of tightening pressures, following the easing of U.S. inflation the previous day and the Bank of Korea's decision to keep the base interest rate unchanged. Market analysts suggest that with the easing of U.S. inflationary pressures and the domestic interest rate freeze, interest rates are stabilizing downward.

KOSPI recovers to 2590 level... KOSDAQ reclaims 890 level

On the 13th, the KOSPI closed at 2591.23, up 16.51 points (0.64%) from the previous day. The KOSDAQ ended the session at 893.07, rising 13.19 points (1.50%).

[Image source=Yonhap News]

Foreign and institutional buying drove the KOSPI's rise. On that day, foreigners net purchased 213.2 billion KRW in the KOSPI market and 180.1 billion KRW in the KOSDAQ market. Institutions bought 508.6 billion KRW in the KOSPI market but sold 29 billion KRW in the KOSDAQ market. Individuals net sold 719 billion KRW and 148.2 billion KRW in the two markets, respectively.

Seokhwan Kim, a researcher at Mirae Asset Securities, analyzed, "Following the release of the U.S. Consumer Price Index (CPI), relief over the slowing inflation restored risk appetite, and the Bank of Korea's Monetary Policy Committee's decision to hold rates steady helped resolve uncertainties. The won-dollar exchange rate also fell by more than 10 won, with foreigners net buying over 1.5 trillion KRW in the futures market, supporting the rally." On that day, the won-dollar exchange rate in the Seoul foreign exchange market closed at 1,274.0 won, down 14.7 won from the previous day. This is the first time in about a month since June 16 (1,271.9 won) that the won-dollar exchange rate closed in the 1,270 won range.

The Bank of Korea's Monetary Policy Committee held a meeting on monetary policy direction and decided to keep the base interest rate at 3.50% per annum. This marks the fourth consecutive freeze following February, April, and May.

Jaegyun Lim, a researcher at KB Securities, stated, "The U.S. inflation data for June, released the previous day, came in below market expectations, and the Bank of Korea's low assessment of the possibility of further rate hikes is leading to a downward stabilization of interest rates. The Bank of Korea is expected to maintain its freeze stance throughout the year," he analyzed.

Early interest rate cuts are expected to be difficult to realize. Kyungrok Lee, a researcher at Shinyoung Securities, said, "The unanimous decision to hold the base rate steady in July was in line with expectations. Market interest rates fell sharply as the U.S. CPI slowed and the possibility of additional tightening by the Bank of Korea decreased. There is little need for further hikes in the near term, and early cuts seem unlikely, so we maintain our forecast of a final rate of 3.50%," he said.

Yoonmin Baek, a researcher at Kyobo Securities, also noted, "The possibility of a rate cut within the year has significantly decreased. Basically, if inflation follows the Bank of Korea's forecast path, the demand for easing monetary tightening amid downward economic pressure and expanding financial instability will increase. However, judging from the remarks of Bank of Korea Governor Lee Chang-yong at the Monetary Policy Committee press conference, it seems difficult to proactively respond with policy measures before domestic and external risk factors materialize," he explained.

Celltrion Trio Continues Rally on Merger Expectations

Reflecting merger expectations, Celltrion, Celltrion Healthcare, and Celltrion Pharm continued their strong performance for the second day.

On that day, Celltrion closed at 156,000 KRW, up 2.30% from the previous day. It had also shown a strong gain of over 4% the day before. Celltrion Healthcare rose 2.31%, and Celltrion Pharm increased by 9.89%.

The previous day, it was reported that Celltrion had selected Mirae Asset Securities as the lead manager for the merger of the three listed companies within the group: Celltrion, Celltrion Healthcare, and Celltrion Pharm, fueling merger expectations.

In response to the Korea Exchange's inquiry disclosure request regarding the official start of the merger process, Celltrion stated, "We have currently completed the selection of the lead manager and are reviewing the merger among the business companies. However, no final decisions have been made regarding the specific merger targets, timing, methods, or forms," they replied.

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