The won-dollar exchange rate, which surpassed 1,460 won on the 26th, has continued its ascent, reaching 1,470 won in just a day. Political uncertainty is expanding due to events such as the imposition of martial law, the impeachment motion against President Yoon Suk-yeol passing the National Assembly, and the proposal of an impeachment motion against Acting President Han Duk-soo, leading to a sharp decline in the value of the won. There was also an influence from the weakness of the yen, which has a high correlation with the won.
According to the Seoul foreign exchange market on the 27th, as of 9:53 a.m., the exchange rate is trading at 1,474.4 won. On this day, the exchange rate opened at 1,467.5 won, up 2.7 won compared to the previous day's closing price of the weekly transaction (3:30 p.m.), and promptly rose, surpassing 1,470 won at around 9:15 a.m. (1,470.1 won).
In the weekly transactions, the exchange rate surpassing 1,460 won during the session is the first since March 16, 2009 (1,488 won), amid the global financial crisis. Before the financial crisis, the last time was March 20, 1998 (1,472 won), during the International Monetary Fund (IMF) foreign exchange crisis.
The uncertainty in the political situation was further intensified after Acting President Han Duk-soo announced through a nationally broadcast statement that the appointment of constitutional court judges would be withheld until an agreement between the ruling and opposition parties is reached, and with the Democratic Party proposing an impeachment motion against Acting President Han. The opposition party plans to vote on the impeachment motion at a plenary session to be held on the afternoon of the 27th.
The movement of the yen, which has a high correlation with the won, also had an impact. On the 25th, Kazuo Ueda, Governor of the Bank of Japan (BOJ), during an event of the Japan Business Federation (Keidanren), mentioned regarding the timing of a rate hike, 'It depends on future economic, price, and financial conditions,' while avoiding a detailed explanation. Subsequently, the yen weakened, and on the 26th, the dollar-yen exchange rate surpassed 158 yen for the first time since last July.
The dollar, which had been consistently strong, has turned somewhat weak but failed to stop the rise in the exchange rate. Last week (15th to 21st), the number of new U.S. unemployment claims reached 219,000, the highest in three years, causing the dollar to weaken. According to Investing.com, the Dollar Index (a value showing the dollar's price compared to six major countries' currencies), which had risen to 108.48 on the 19th, fell to the early 108s as of 9:34 a.m. on the 27th.
Min Kyung-won, a researcher at Woori Bank Research Institute, noted, 'The won-dollar exchange rate today is expected to center around 1,470 won as the pressures of rising exchange rates due to political instability and the weakening yen take precedence,' adding, 'However, the foreign exchange authorities' caution over minor adjustments and the inflow of exporters' month-end settlement demand are expected to reduce the extent of the exchange rate's rise.'