Won-Dollar Exchange Rate Surges to 1340.5 Won... Hitting New Highs for 3 Consecutive Trading Days

by Seo Sojeong

Published 26 Apr.2023 09:52(KST)

On the 26th, the won-dollar exchange rate hit a new high for the third consecutive trading day.

According to the Seoul foreign exchange market, the exchange rate opened at 1,339.1 won, up 6.9 won from the previous day, and surged to 1,340.5 won around 9:13 a.m., breaking the record high again.

This was due to risk aversion sentiment triggered by escalating instability in the U.S. banking sector.

The crisis rumors surrounding First Republic Bank, which was already under pressure following the collapse of Silicon Valley Bank (SVB) in the U.S. last month, resurfaced, causing the bank's stock price to plummet.

According to the first-quarter earnings report, First Republic Bank's deposit holdings stood at $104.5 billion (approximately 140 trillion won), a sharp decline of $72 billion (40.8%) compared to the end of last year. Stock prices of small- and medium-sized regional banks also underperformed amid rising concerns about their stability.

In the market, financial instability centered on U.S. banks intensified, leading the won-dollar exchange rate to hit a new high that day. However, caution regarding government intervention also played a role, potentially limiting the extent of the exchange rate increase.

[Image source=Yonhap News]