[Anchor]

The won-dollar exchange rate, which once soared above the 1,500-won mark, has fallen to the 1,390-won range, recording its lowest level in about 11 months. The decline is attributed to growing expectations that the U.S. may freeze its benchmark interest rate, alongside an increase in demand from semiconductor export companies to convert their dollars into the Korean won.

Reporter Lee Tae-gwon has the details.

[Reporter]

Starting the day at 1,413 won at 6:00 a.m., the won-dollar exchange rate steadily expanded its losses to close at 1,397 won at 3:30 p.m.

Breaching the 1,400-won threshold marks the lowest level in ten and a half months, since September 24 of last year.

The won-dollar exchange rate hit its highest level of the year at 1,555 won based on the weekly closing price early last month, but dropped below the 1,500-won range following SK Hynix's American Depositary Receipt (ADR) listing, and has since maintained a downward trend.

This is seen as the result of inflows related to the ADR, coupled with surging demand from booming export sectors such as semiconductors to convert dollars into won for corporate tax interim payments due later this month.

[Lee Min-hyuk / Economist, KB Kookmin Bank: Among exporters, particularly centered around semiconductor companies, there is a very strong selling pressure on the dollar. Because there is also a need for won funds to finance domestic investments such as the creation of semiconductor clusters, they are releasing some of the dollar holdings they previously held...]

The weakening of the dollar also influenced the trend, as growing concerns over an economic slowdown lent weight to expectations that the U.S. will not raise its benchmark interest rate next month.

[Baek Seok-hyun / Economist, Shinhan Bank: A month ago, the possibility of a U.S. rate hike in September was just emerging, but recently that expectation is receding. Since Kevin Warsh (Federal Reserve Chair) is not giving a decisive signal, I see this as a factor that could drive the (exchange rate) down.]

While a falling exchange rate lowers import prices, an overly steep decline could increase management uncertainties for export companies due to potential exchange losses.

While the market leaves open the possibility of a further decline in the exchange rate, analysts suggest that variables such as increased demand for dollars resulting from future investments in the U.S. and concerns over rising oil prices originating from the Middle East could act as key factors.

(Camera Reporter: Kim Hak-mo, Video Editor: Jeong Yong-hwa, Designer: Choi Jae-young, VJ: Jeong Han-wook)