Won-Dollar Exchange Rate Closes at 1325.7 Won... Closing Price Hits New High

by Mun Jewon

Published 12 Apr.2023 16:42(KST)

The dealing room of Hana Bank headquarters in Myeongdong, Jung-gu, Seoul on the 12th [Image source=Yonhap News]

On the 12th, the won-dollar exchange rate hit a new yearly high based on the closing price.

This is interpreted as a result of combined factors: concerns that U.S. inflation may be stronger than expected and the ongoing weakness of the Korean won.

On that day, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,325.7 won, up 3.5 won from the previous day's closing price.

This surpassed the yearly high based on the closing price recorded on the 10th of last month (1,324.2 won). In terms of intraday high, it was the highest level since the 10th of last month (1,329.0 won).

The exchange rate opened at 1,322.5 won, 0.3 won higher than the previous day, and showed an upward trend.

Ahead of the U.S. Consumer Price Index (CPI) announcement scheduled for that night in Korean time, concerns that inflation could be higher than expected increased pressure on the exchange rate to rise.

Additionally, the continued weakness of the won is also acting as a factor driving the exchange rate up. Due to recent export sluggishness and trade deficits caused by semiconductor downturns, the won has been depreciating.

Moreover, foreign investors converting dividends received in won into dollars to remit back to their home countries increased demand for dollars, contributing to the rise in the exchange rate.

The dollar index, which measures the value of the dollar against the currencies of six major countries, stood at 102.08 as of 3:25 a.m. local time on the 12th.