Dollar Exchange Rate Hits Lowest in 1 Year and 2 Months... Will It Fall Further?

[Anchor]

The won-dollar exchange rate dropped to the 1,340-won range during trading for the first time since July of last year. Driven by strong export performance and favorable internal and external conditions, projections suggest the downward trend will continue for a while.

Reporter Kim Hye-min has the details.

[Reporter]

Song Min-seung is heading to the United States to attend a friend's wedding.

He had delayed exchanging currency amid the falling won-dollar exchange rate.

At the Incheon Airport exchange booth, the rate is 1,409 won per dollar, which is more than 160 won cheaper than late May, when rates were soaring.

[Song Min-seung / US Traveler: Two or three months ago, the exchange rate was 1,500 won, so I couldn't even think about it. But seeing a downward trend, I decided to wait until the day before departure, and since it kept dropping, I ended up exchanging money right on the day I leave.]

In the Seoul foreign exchange market, the won-dollar exchange rate plummeted to 1,349.5 won during trading, entering the 1,340-won range for the first time since July 1 of last year.

The pace is also rapid, having dropped by more than 200 won in just two months.

Exporting companies continue to dump dollars into the market, and recent selling of South Korean stocks by foreign investors has slowed down somewhat.

Additionally, speculations that the US and Japan might step in with further interventions to prevent the depreciation of the yen are having an effect.

Analysts interpret this as the value of the won rising alongside the yen, as they tend to be grouped together as Asian currencies.

Expectations have also piled up that the interest rate gap between the US and South Korea could narrow, as possibilities are raised that the US Federal Reserve may freeze its benchmark interest rate.

[Christopher Waller / US Federal Reserve Governor: If the data coming in over the next couple of weeks continues along these lines, that will support maintaining the current rate level.]

Bolstered by strong semiconductor exports, July's current account recorded a surplus in the 42 billion dollar range, marking the second-largest in history, which also had a significant impact.

[Joo Won / Head of Economic Research Division, Hyundai Research Institute: There is not a single place forecasting that the South Korean economy will perform poorly in the second half. To that extent, if South Korea's economic growth rate itself rises due to semiconductor exports, the value of the won will also go up... You can think of the 1,300-won range as the new normal.]

Some securities firms have even released forecasts that the exchange rate could slide down to the early 1,300-won range in the short term as corporate-driven dollar selling volume increases.

(Photo: Yonhap News)
(Reported by Kim Hye-min | Video by Lee Moo-jin | Video Editing by Jung Yong-hwa | VJ by Jung Han-wook | Design by Cho Soo-in)
※ Please note: This article was translated by AI and may contain errors.