The won-dollar exchange rate against the U.S. dollar closed at 1,554.9 won on the 1st, up 5.5 won from the previous transaction day. The weekly closing level that day was the highest since Mar. 2, 2009 (1,570.3 won), during the global financial crisis.
The won-dollar exchange rate began trading at 1,549.8 won that day and rose immediately. Around 10:18 a.m., it surged to 1,559.2 won, approaching 1,560 won. From 2 p.m., it fell into the 1,540-won range, but eventually rose to finish the transaction.
As a result, the won-dollar exchange rate has stayed above 1,500 won for 32 consecutive transaction days from May 15 to that day, the second-longest after the foreign exchange crisis (49 consecutive transaction days). If the current situation continues for three weeks, it will set an all-time record.
The recent rise in the won-dollar exchange rate is seen as the result of a strong dollar and a weak yen occurring at the same time. When the United States raises its benchmark interest rate to tame inflation, other currency, including the won, tend to weaken. In particular, the yen, which moves in tandem with the won, has fallen to a level rarely seen. The previous day, the yen-dollar exchange rate against the dollar (yen-dollar rate) rose to as high as 162.3 yen during trading, the highest in 39 years and six months since December 1986, right after the Plaza Accord.
Net selling of domestic stocks by foreign investors is also affecting the exchange rate. When foreigners sell domestic stocks and convert the proceeds into dollars, the won-dollar rate tends to rise. Foreigners recorded net selling of 1.7 trillion won in the Korea Exchange's main board that day. On the 29th of last month, they posted a record-high net selling of 7.7557 trillion won. Net selling over the past three months alone amounts to about 75 trillion won.