Semiconductor exporters’ increasing pressure to sell dollars has driven the dollar-won exchange rate down to the 1,340 KRW (about 1 USD) range.
As of 9:07 a.m. (Korean time) on Monday, the USD-KRW exchange rate was trading at 1,345.8 KRW (about 1 USD) in the Seoul foreign exchange market, down 4.6 KRW (about 0 USD) from the previous day’s weekly closing price.
Despite U.S. August employment figures surpassing expectations by more than twofold, heightening concerns about potential interest rate hikes, the substantial demand for dollar conversions from domestic exporters, fueled by a significant current account surplus, is exerting downward pressure on the exchange rate.
KB Kookmin Bank economist Lee Min-hyuk analyzed that the Bank of Korea projects current account surpluses of 450 billion USD and 430 billion USD for this year and next, respectively, based on strong semiconductor performance. This scale is expected to outweigh overseas investments and foreign capital outflows. Lee suggests that the traditional mechanism of dollar supply from current account surpluses leading to won appreciation may resurface.