The won-dollar exchange rate rode a rollercoaster on the 27th ahead of the vote on the impeachment motion against Han Duck-soo, acting president. It surged past 1,470 won and 1,480 won consecutively for the first time in 15 years and 9 months since the global financial crisis, fluctuating nearly 20 won in a single day.
According to the Seoul foreign exchange market on this day, the won-dollar exchange rate started at 1,467.5 won, up 2.7 won from the previous transaction day. It continued to rise, surpassing 1,470 won at 9:15 a.m., and by 10:13 a.m., it topped 1,480 won. The intraday high was 1,486.7 won, marking the highest level since March 16, 2009 (1,488.0 won), during the global financial crisis.
The rapidly increasing exchange rate turned downward in the afternoon. Around 12:14 p.m., it fell below 1,480 won to 1,479.8 won, and by 2:07 p.m., it re-entered the 1,460 won range at 1,469.0 won. The weekly transaction closing price (as of 3:30 p.m.) was 1,467.5 won, up 2.7 won from the previous transaction day. The volatility between the high point and the weekly transaction closing price reached 19.2 won.
The sharp rise in the exchange rate appears to result from heightened political uncertainty after the acting president refused to appoint a constitutional court judge yesterday (26th), and the opposition party countered by submitting an impeachment motion against the acting president. If the impeachment passes the National Assembly, Choi Sang-mok, deputy prime minister of economy and Minister of Strategy and Finance, will act as president.
The dollar's weakness could not prevent the exchange rate rise. According to Investing.com, the dollar index (showcasing the dollar's value against six major currencies) had reached 108.48 on the 19th but had fallen to the low 108s by 4:07 p.m. This was due to last week's (15th-21st) U.S. initial jobless claims recording their highest number in three years, at 219,000 claims.
Kim Chan-hee of the Shinhan Investment Corp Research Institute mentioned, "The won-dollar exchange rate has further risen into the 1,470 won range, extending the trend of setting new highs," noting that "while the external dollar strength has waned, the prolonged domestic political uncertainty continues to exert pressure for capital outflow." Kim elaborated, saying, "It is domestic capital outflow, more than foreign capital, that is driving the (exchange rate rise)."
Jo Yong-gu of ShinYoung Securities' Research Institute stated, "The exchange rate rose by 30-35 won following President Yoon Seok-youl's martial law, and another 30 won ahead of the vote on the impeachment motion against Han Duck-soo," indicating, "The upper limit of the exchange rate could exceed 1,500 won solely due to domestic issues, and if the U.S. new government's tariff policy becomes specific in the first half of next year, it could rise to 1,550 won."