The won-dollar exchange rate closed at 1,512.1 won on the 9th. It fell 22.9 won from the previous transaction day. Compared with on the 5th, when it hovered around 1,560 won, it has calmed.
On a weekly closing basis, the won-dollar exchange rate has stayed above 1,500 won for 16 consecutive transaction days from the 15th of last month through the day. It is the second-longest stretch after the foreign exchange crisis (49 consecutive transaction days).
The decline in the won-dollar exchange rate on the day is seen as due to dollar weakness after armed clashes in the Middle East were halted. Israel and Iran, which had attacked each other over the weekend, decided to stop additional attacks. It came about an hour after U.S. President Donald Trump demanded a cease-fire on social media.
In particular, strong verbal intervention by the foreign exchange authorities also appears to have influenced the drop in the won-dollar exchange rate. The government plans to begin inspections this week of speculative transactions and market-disrupting acts occurring in the foreign exchange market. It said it will respond strictly to transactions that fuel won weakness.
In particular, the government is known to be focusing inspections on banks engaged in foreign exchange operations. It is expected to examine transaction records conducted in the offshore non-deliverable forward (NDF) market outside the Seoul foreign exchange market.
However, continued net selling of domestic stocks by foreign investors remains a factor weakening the won. When foreigners sell domestic stocks and exchange the proceeds into dollars, dollar demand increases, which pushes the won-dollar exchange rate higher.
Foreign investors also recorded net selling of more than 2 trillion won on the day. Including the day, that makes 22 consecutive transaction days of net selling. The accumulated net selling during this period was estimated to reach 72 trillion won.