[Anchor]

Despite record-high exports leading to an increased inflow of foreign currency, the exchange rate is actually rising. Today, July 1, the won-dollar exchange rate hit its highest level in 17 years, not seen since the 2009 financial crisis.

Reporter Lee Tae-gwon has the story.

[Reporter]

The won-dollar exchange rate soared to as high as 1,559 won at one point this morning.

Although it retreated slightly following suspected intervention by foreign exchange authorities, the rate closed the daytime session at 1,554 won, up 5.5 won.

This marks the highest level in 17 years and 3 months, since March 5, 2009, during the global financial crisis.

The average exchange rate for the first half of this year was 1,484 won, the highest since the first half of 1998, when it reached 1,494 won during the Asian financial crisis.

Despite efforts to bring in dollars, such as creating accounts for retail investors returning to U.S. stocks and RIA accounts, and injecting 45.3 billion dollars into the market over six quarters to intervene, these measures have proven insufficient to stop the rise in the exchange rate.

[Jeon Kyu-yeon / Research Analyst at Hana Securities: Since we cannot keep depleting our foreign exchange reserves, interventions must be meaningful. However, even when we do intervene, it only serves to cap the upper limit...]

The primary reason cited is the surge in demand for dollars as foreign investors significantly adjust their portfolios amid the domestic stock market boom.

Foreigners net sold 150 trillion won worth of stocks on the KOSPI in the first half of the year alone, and they have continued to net sell for nine consecutive trading days.

Investment fervor for the U.S. market, fueled by the Nvidia craze followed by SpaceX and high-leverage semiconductor products, also shows no signs of cooling.

Over the past year, South Korea’s current account surplus stood at 177.9 billion dollars. However, with 112.1 billion dollars in overseas investments by domestic residents and 44.8 billion dollars in net stock sales by foreigners, the net supply of foreign currency was limited to 21 billion dollars.

[Min Gyeong-won / Economist at Woori Bank: South Korea is no longer a country where foreign exchange supply and demand are determined solely by the current account; the flow of dollars in the financial market has become much more important. This is because far more dollars enter through the financial account.]

Recently, the strong dollar phenomenon, triggered by signals of interest rate hikes in the U.S., has further compounded the situation.

Analysts suggest that as the yen-dollar exchange rate hit a 40-year high of 162 yen, the won has also weakened due to its association with other Asian currencies.

With a layering of external factors beyond the government's control, forecasts suggest that the structural weakness of the won is likely to persist.

(Video reporting: Park Jin-ho | Video editing: Kim Jong-mi | Design: Jeon Yu-geun, Choi Jae-young)