On Jan. 2, the first transaction day of the new year, the won-dollar exchange rate closed at 1,441.8 won, up 2.8 won from the previous transaction day's weekly trading closing price as of 3:30 p.m.
The rate opened at 1,439.5 won, slightly higher than the previous transaction day, briefly fell to the 1,439-won level early in the session, and then gradually trended higher. As the rate fell, bargain-hunting to buy dollars in advance and settlement demand from importers flowed in, which appears to have increased upward pressure.
Intraday, the rate moved in the low-to-mid 1,440-won range and attempted further gains, but the possibility of intervention by foreign exchange authorities and caution over the National Pension Service's exchange-rate response appeared to cap the upside. As a result, the rate repeatedly rose and fell in the 1,440-won range without a strong direction before closing higher.
Rhee Chang-yong, governor of the Bank of Korea, said, "Overseas investment banks (IB) think an exchange rate at the 1,480-won level is too high," and "domestic expectations are driving the rise in the exchange rate significantly."
Regarding the role of the National Pension Service, Rhee said, "It is only natural to do more hedging than now and to reduce overseas investment," and "the National Pension Service says it will be allowed to issue its own foreign debt and use that to reduce its impact on the foreign exchange market, and I think that is also a good approach."