Exchange Rates
The won-dollar exchange rate fell for four days in a row to close at 1,020.6 won per U.S. dollar. This is the lowest since August 7, 2008, when the rate reached 1,016.5 won per U.S. dollar.
The Korean currency lost 0.8 won from the previous session on May 29, due mainly to the current account surplus continuing for 26 months and the end-of-month sale of the U.S. dollar by exporters. According to the Bank of Korea, the current account surplus was US$7.12 billion and the commodity balance surplus hit a new high in April.
That day, the won-dollar rate started at 1,021.1 won, 0.3 won lower than the closing price of the preceding session, but rose close to 1,023 won due to concerns over intervention by the foreign exchange authorities. Then, it fell to approximately 1,020 won right before the closing of the market.
Such intervention is like a double-edged sword. “Until recently, a small number of economic participants such as big businesses have benefited greatly from the depreciation of the won, while a huge number of workers and small firms shouldered the burden,” said Lee Hyun-suk, business administration professor at Sungshin Women’s University, adding, “Korea’s economic conditions are sound now, and the authorities do not have to be jittery any longer about the foreign exchange rate movement.”