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The won-dollar exchange rate closed the daytime trading session at 1,535 won, falling for the first time in four trading days following verbal intervention by financial authorities. While the immediate pressure has been eased, it remains uncertain whether this trend will last. This high exchange rate is directly translating into a burden for small and medium-sized enterprises (SMEs) and the general public.
Reporter Lee Tae-kwon has the story.
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This is a small manufacturing company that produces food packaging materials.
Its main raw materials include polyethylene, which is extracted from naphtha.
With raw material prices soaring due to the war in the Middle East and the exchange rate rising, the company is facing a significant cost burden.
[Jung Hee-gook / CEO of a food packaging company: Because of the oil crisis, raw material prices have risen by 55%, and the exchange rate has added another 5 to 6% to our burden.]
Franchise coffee shops, which must import coffee beans, have been raising their prices one after another, citing the high exchange rate.
[Park Sun-woo / Yongsan-gu, Seoul: Even 100 or 200 won can add up to a large amount if you drink a couple of cups. So, I think it feels quite significant.]
At airport currency exchange counters, the won-dollar exchange rate has surpassed 1,600 won, increasing the burden on travelers.
A high exchange rate drives up the prices of imported goods, ultimately leading to a burden on consumers.
Research indicates that a 10% rise in the exchange rate can increase the consumer price inflation rate by approximately 0.3 to 0.5 percentage points.
The high-flying won-dollar exchange rate is driven by the strengthening dollar amid growing possibilities of a U.S. interest rate hike, as well as a surge in demand for dollar conversion as foreign investors have net-sold 69 trillion won worth of domestic stocks over the past month.
Financial authorities are also recently paying attention to speculative forces betting on the rise of the exchange rate and export companies that are not converting the dollars they earned overseas.
[Seok Byoung-hoon / Professor of Economics at Ewha Womans University: Export companies that should be supplying dollars need to fulfill their investments in the U.S., so they don't have a need to convert dollars into won. This is causing a supply-demand imbalance, leading to an even sharper rise.]
Although financial authorities have intervened to put out the immediate fire, the external factors causing the exchange rate to rise remain strong, making it a frustrating situation where a change in direction is difficult in the short term.
(Reported by Kim Hak-mo | Video by Jung Yong-hwa | Graphics by Jang Chae-woo)
※ Please note: This article was translated by AI and may contain errors.