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S. Korean currency falls to 13-year low against U.S. dollar Updated: 2022-06-24 05:06:37 KST


On Thursday, for the first time in 13 years, the rate for the South Korean won against the U.S. dollar surpassed 1,3-hundred.
The won closed at 13-oh-1.8 won per dollar, up 4-and-a-half won from the day before.
At one point during the day, it almost reached 13-oh-3.
The last time it broke 13-hundred was in mid-2009 during the global financial crisis.

The Korean won's rapid depreciation comes amid monetary tightening in the U.S. to fight inflation measures that could tip the global economy into recession.
While some fear that the won-dollar exchange rate could keep rising, even to 14-hundred, if there's another "giant step" in rates at the Fed next month, an expert said this is unlikely.

"Rather than actually trying to raise interest rates, the Fed is giving the market a kind of signal a strong signal that they're willing to take the risk of putting pressure on consumption. In fact, it's the U.S. that would have to cope with the fallout of another giant step."

To address this volatility in the currency, South Korea's Finance Minister, Choo Kyung-ho, said Thursday that the BOK will take steps to stabilize the market if needed.

While Choo didn't specify what measures the government would take, the expert said there are two ways it could go.
The first is to increase government spending, and the second is to raise rates.

"We expect the government to increase spending by expanding public sector businesses or making use of its sovereign wealth funds. Also, it's going to follow the U.S. by raising interest rates."

Meanwhile, South Korea's benchmark stock index, the KOSPI, fell Thursday to its lowest level since November 2nd, 2020 and the tech-heavy KOSDAQ to its lowest since July the same year.
Shin Sebyuck, Arirang News.
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