This year's won-dollar exchange rate volatility against the U.S. dollar was the highest since 2009, when the global financial crisis hit.
According to the Seoul foreign exchange market and others on the 9th, the average monthly exchange-rate swing from January to July this year was 47 won. That is the largest since 2009 (61.2 won), when exchange-rate volatility surged during the global financial crisis.
Only in 1997 (72.2 won) and 1998 (97.6 won), during the foreign exchange crisis, and in 2008 (68.3 won) and 2009 (61.2 won), during the financial crisis, did the average monthly exchange-rate swing exceed 40 won.
Daily volatility was also the highest this year since the financial crisis. From Jan. 1 to Aug. 7 this year, the average daily exchange-rate swing was 8.2 won. That is the highest since 2009 (9.4 won).
The won-dollar exchange rate hit a peak of 1,555.8 won on the 2nd of last month and then fell into the 1,400-won range. At 6 a.m. on the 8th of this month, the won-dollar rate closed the week at 1,409.5 won. During the session, it fell to as low as 1,407.3 won, the lowest since Oct. 2 last year (1,399.5 won). The move is seen as driven by the listing of SK hynix American depositary receipts (ADR) and strength in the Japanese yen, which is linked to the won. On the 31st of last month, U.S. and Japanese foreign exchange authorities said they would jointly purchase yen in response to yen weakness.
Lee Jin-kyeong, an analyst at Shinhan Investment & Securities, said, "Ahead of the late-August interim corporate tax prepayment schedule for domestic corporations, corporate foreign-exchange conversions will emerge and act to push the won-dollar rate lower," adding, "Won strength (a lower won-dollar rate) could track yen strength, but it is necessary to monitor whether there will be additional intervention."