The won-dollar exchange rate broke the ointment point on April 30, 2009, exceeding 1323.0 won on April 30, 2009, when the global financial crisis was triggered on the 15th. The last ointment is 1312.0 won (closing price) on the 14th, the previous trading day.
As the won-dollar exchange rate increases, domestic prices are under pressure. This is not the only problem in Korea. In order to prevent the import inflation due to the strong US dollar’s strength, it is being captured to reduce its weakness in order to prevent inflation.
There is a prospect that the ‘reverse exchange rate war’, which leads to the strength of the currency, is not a ‘exchange rate war’, which is trying to lower the currency value and promotes the growth rate.
Climb to KRW 1325.4 won and dollar exchange rate… 10% increase from the beginning of the year
The won-dollar exchange rate was opened at 1318.0 won in the Seoul foreign exchange market and soared to 1325.4 won. Based on the market price, on April 30, 2009, it exceeded 1323.0 won, the highest in 13 years and two months. The won’s won in the US dollar is 10% higher than the beginning of the year.
The market is foreseen that the won will be lower than it is now. KB Kookmin Bank’s researcher Moon Jung-hee and Shinhan Bank Baek Seok-hyun Economist explained, It is open up to 1350 won.
This is because the US dollar is making a ‘super strong’ compared to global currency, so it cannot be avoided on domestic currencies. The US Federal Reserve (Fed) Open Market Committee (FOMC) also remains uncertainty in interest rate hikes on 26-27. Jerome Powell, chairman of the Fed, announced that it would raise the rate of 0.50%p or 0.75%p in June, but the US consumer price index (CPI) soared to 9.1%in June.
Imported price 34% in June… You can raise more than 1%p of consumer prices
The high exchange rate is not a bad option in exporting countries. Nevertheless, as the current price is continuously rising, the inflation is acting as a pressure. In fact, domestic import prices rose 33.6% year-on-year.
Moon Jung-hee, a researcher, said, The domestic import price has risen by 33.6% year-on-year. I can climb.
Currently, consumer prices rise in June is 6%. In the market, the domestic inflation rate is expected to reach up to 7%. On the 13th, Lee Chang-yong, the president of the Bank of Korea, said, There is a growing concern that the high price of high prices may be fixed as expected inflation expectations are spread and inflation interactions are strengthened, did.
Reverse exchange war trigger? After the national foreign exchange market involvement
Each country is trying to raise the value of currency in order to lower its currency value compared to the US dollar, import prices and high prices. This work is expressed as ‘reverse exchange war’. It is a contrasting concept in contrast to the ‘exchange rate war’, which is arbitrarily weakened for deflation and economic stimulus for more than decades in response to the policy to limit the weakness of the currency by focusing on price stability rather than economic stimulus during the inflation period.
According to a report published by the International Financial Center on the 14th, the recent foreign exchange market intervention was found. According to the report, Switzerland has intervened in the foreign exchange market in order to stabilize inflation in response to high inflation pressure. Credit Swiss observed that it may be in foreign exchange net selling to prevent import price and inflation deterioration due to the weakness of Francization in Switzerland.
Foreign exchange interventions have exhausted the central bank’s foreign exchange reserves. Foreign exchange reserves in China, Hong Kong, Indonesia, and the Philippines in April-May this year are the lowest since 2020.
It is also likely to be involved in the foreign exchange market. The Bank of Korea’s foreign exchange net trading in the first quarter of this year decreased by $ 8.31 billion. Experts say that they were exhausted to defend the weak currency while selling foreign currency in the offshore market.
It is difficult to pinch the point of view of the reverse exchange rate war, but there are some places that say that the reverse exchange rate has already begun. It should be noted that if it decreases to the level, it may cause another exchange rate anxiety.