Fluctuation of Korean won exchange rate
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Since the beginning of 2024, the Korean won has experienced a significant depreciation against the US dollar, falling by 5.5% cumulatively, which is particularly prominent among Asian currencies. The reasons for this exchange rate depreciation can be attributed to two main factors. Firstly, the Federal Reserve’s continuous interest rate hike policy has tightened global liquidity, resulting in the appreciation of the US dollar and the relative depreciation of other currencies. As an important economy in Asia, South Korea’s currency has also inevitably been affected by this trend. Secondly, some internal economic factors in South Korea have also exacerbated the depreciation pressure on the Korean won. For example, the rapid growth of South Korean corporate debt, especially in the real estate sector, as well as the survival crisis faced by small and medium-sized enterprises, have put considerable pressure on the South Korean economy, further affecting the Korean won’s exchange rate.
