Exchange Rate Hits 1,400 Won Range Due to Export Slowdown and Strong Dollar (Update)
The won-dollar exchange rate returned to the 1,400 won level after five trading days. This was due to the dollar's strength amid growing concerns over the slowdown in exports.
On the 2nd, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,401.3 won, up 6.6 won from the previous trading day's weekly session closing price (3:30 PM). Compared to the closing price at 2 AM on November 30 (1,396.5 won), it rose by 4.8 won.
The won-dollar exchange rate opened at 1,396 won, up 1.3 won from the previous trading day's weekly session closing price, then surged during the day to reach around 1,402 won. This marks the first time in five trading days since the 25th (1,402.2 won) that the rate has re-entered the 1,400 won range based on the weekly session closing price.
This is interpreted as reflecting growing concerns over sluggish economic growth in South Korea due to a slowdown in export growth. According to the Ministry of Trade, Industry and Energy, exports in November maintained a positive trend for the 14th consecutive month, but the growth rate was 1.4% compared to the same month last year, the lowest figure since turning positive in October last year. The monthly export growth rate peaked at 13.5% in July and steadily declined to the 1% range last month.
The dollar showed renewed strength. The dollar index, which measures the value of the dollar against six major currencies, rose from the 105 level the previous day to the 106 level.
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Park Sang-hyun, a researcher at iM Securities, explained, "Last week, the Bank of Korea's Monetary Policy Committee lowered the economic growth rate forecast, and concerns about the economy continued to emerge. South Korea's notably weak export results in November significantly heightened these concerns. Additionally, the weakening of neighboring currencies such as the yen and yuan collectively influenced the upward trend in the exchange rate."
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