There are even customers who bring in wads of dollars that smell like a closet.
On the 24th in front of a currency exchange in Myeong-dong, Seoul. People clutching number slips stood in a long line, and the counter was busy with customers handing over dollars to exchange for won. An employee said, "There are many foreigners, but the number of customers trying to sell dollars they saved at home when the exchange rate rose has increased significantly." The won-dollar rate is hovering above 1,500 won for the first time in about 17 years since the global financial crisis.
◇"Dormant dollars are pouring out"… currency exchanges see a "boon"
On this day, there was a noticeable increase in customers trying to sell dollars at currency exchanges across Myeong-dong. A representative at one exchange said, "Some even bring dollars tied with old rubber bands," and noted, "As the exchange rate rose, demand to cash out has doubled compared with a month ago."
As demand for exchange grows, some exchanges are enjoying an "exchange-rate windfall." They said visitor numbers have risen sharply from usual and sales have increased.
Jang Song-gi, 64, from Songpa District, Seoul, said, "I came out to sell part of the dollars I saved after the IMF foreign exchange crisis more than 30 years ago," adding, "I came in person to the place offering the best rate."
Some places, however, cannot handle the increased customers. An exchange employee said, "There are many customers selling dollars, but banks are not supplying enough won to private exchanges," and added, "Compared with two years ago, we are receiving only one-tenth as much, so even when there are customers, there are many cases where a transaction cannot proceed."
Meanwhile, the burden is growing for overseas travelers who need dollars and for families with students studying abroad. The impact of the strong dollar is spreading across overall consumption.
With overseas travel expenses rising, travelers are feeling the burden of airfare and lodging. A person surnamed Kim in her 30s, who is planning a honeymoon in Nov., said, "As fuel surcharges have risen, airfares and lodging costs have jumped together," adding, "With this money, we could almost buy a new home appliance."
The burden has also grown for families with students studying abroad. A parent who sent a child to study in the United States said, "We used to send about 3 million won per month, but as the exchange rate rose, it's nearing 4 million won," adding, "The living expense burden has increased significantly."
◇Overseas service subscription fees also take a direct hit
Users of subscription services billed in dollars are also being affected. For artificial intelligence (AI) services and some software, fees are set in dollars, so a higher exchange rate directly leads to an expense increase.
Compared with June last year, when the won-dollar rate was around 1,350 won, the roughly $20-per-month ChatGPT Plus subscription would cost about 36,000 won more per year. From exchange rate moves alone, the effective subscription fee has risen more than 10%.
Subscription services paid in won in Korea are also within the sphere of influence. Netflix and YouTube Premium currently charge in won, but the industry sees the higher exchange rate as a factor that could lead to price hikes over the long term.
Experts say the impact of the rising exchange rate has entered a phase of spreading from financial markets to the real economy. Professor Seok Byung-hoon said, "A strong dollar inevitably stokes inflation and dampens consumer sentiment," adding, "If the rate continues to fluctuate in the 1,500-won range, upward pressure on consumer prices will also grow."