Back-to-back QEs
No less than 13 countries have adopted quantitative easing since the beginning of this year.
The Korea Center for International Finance (KCIF) warned this could lead to a relative appreciation of the Korean currency and a negative impact on Korean exporters.
According to the KCIF’s report released on Feb. 4, the European Central Bank (ECB) came up with quantitative easing first. Then, Switzerland abandoned its fixed exchange rate system and cut its interest rate, while Denmark lowered its rate three times. This has resulted in similar moves in Canada, India, and Australia. Norway, Sweden, China, and Thailand are expected to jump on the bandwagon, too.
Under the circumstances, the value of the Korean won is fluctuating. The won-dollar exchange rate rose about 10 won per U.S. dollar two days ago, but plummeted by more than 13 won on Feb. 4. The decrement was a 19-month record.