Soaring Exchange Rate
A sharp drop in international oil prices and a possible drop in Japan’s interest rates drove up the Korean won-US dollar exchange rate to a five year and eight month high.
On February 3, the rate closed at 1219.3 won, up 11.9 won from the previous day in the Seoul foreign exchange market. The figure is the highest in five years and eight months since June 15, 2010 (1227.7 won)
On the day, the exchange rate began at 1,214 won, an increase of 6.6 won from the previous day. The exchange rate continued to rise from the morning as it was forecast that oil prices will drop sharply and an agreement to reduce oil production among oil producing nations will be hard to reach.
In the afternoon, the exchange rate surpassed 1,220 won to reach 1221.10 won as it was reported that Kuroda Haruhiko, governor of the Bank of Japan (BOJ) said that the BOJ will further lower its interest rates when necessary. “Foreigners’ continuous selling stocks contributed to the rise in the Korean won-US dollar exchange rate,” said a foreign exchange market specialist.