The won-dollar exchange rate, which surpassed 1,460 won on the 26th, went up to 1,465 won during the day. This is the highest level in 15 years and nine months. Some predict that the exchange rate could exceed 1,500 won.
On this day, the won-dollar exchange rate closed at 1,464.8 won, up 8.4 won from the previous day's closing transaction price (as of 3:30 p.m.). It is the first time in 15 years and nine months since March 13, 2009 (1,483.50 won) during the financial crisis that the closing exchange rate exceeded 1,460 won.
The exchange rate started at 1,455.2 won, down 1.2 won, and then soared to 1,465.5 won at 10:21 a.m. It continued to rise, reaching 1,465.7 won at 3:18 p.m., setting a new high for the year.
As political unrest continues, the value of the won is plummeting. Acting Prime Minister Han Duck-soo announced in a public address at the Government Complex Seoul that the appointment of constitutional judges will be postponed until an agreement is reached between the ruling and opposition parties.
In response, the Democratic Party of Korea immediately proposed an impeachment motion against Acting Prime Minister Han and announced that a vote would be held on the 27th. Following the declaration of martial law by President Yoon Suk-yeol, with the passage of the presidential impeachment motion and the proposal to impeach Han, political uncertainty is escalating.
Externally, the strong dollar trend is pushing up the exchange rate. On the 18th (local time), the Federal Reserve (Fed) triggered a strong dollar by reducing its interest rate cut forecast for next year from four times to two in the dot plot reflecting the rate forecasts of its Commissioners.
The dollar index, which shows the value of the dollar against major six countries' currencies, is at 108. It is the first time since November 2022, when the Fed was actively raising rates, that the dollar index has exceeded 108. Asian currencies are consecutively weakening. The dollar-yen exchange rate is in the 157 yen range, and the dollar-yuan exchange rate is in the 7.30 yuan range.
Experts predict that the exchange rate could rise to 1,500 won. Park Sang-hyun from iM Investment & Securities Research Institute said, “We see the upper limit of the exchange rate at 1,500 won until January to February next year,” adding that “It may be further adjusted upward depending on the inauguration of President Donald Trump and domestic political uncertainties.”
Kim Chan-hee from Shinhan Investment & Securities Research Institute, when asked about the upper limit of the exchange rate, answered, “We should keep the range open at 1,480 won and temporarily even at 1,500 won.” He further explained, “The interaction of domestic political uncertainty and the intensifying strong dollar will lead to a downward rigidity (a phenomenon where prices do not fall) continuing into the beginning of the year.”