The exchange rates in Myeongdong, Seoul, on the 15th. / Photo: News1
The won/dollar exchange rate has surpassed 1,450 won. This is the first time the intraday won/dollar exchange rate has exceeded this level in 15 years and 9 months since the financial crisis.
On the 19th, the won/dollar exchange rate in the Seoul foreign exchange market started trading at 1,453 won, up 17.5 won compared to the previous closing price (1,435.5 won at 3:30 PM). As of 9:30 AM that morning, it continued to fluctuate around 1,450 won. This is the highest level since March 16, 2009 (1,488.5 won).
The sudden rise in the won/dollar exchange rate that day was influenced by the U.S. Federal Reserve’s (Fed) “hawkish rate cut,” which led to a surge in U.S. Treasury yields and the dollar index. The dollar index, which shows the value of the dollar against six major currencies, currently exceeded the 108 mark.
At the FOMC (Federal Open Market Committee) meeting on the 18th (local time), the Fed cut the policy rate by 25 basis points (1bp = 0.01%) from 4.75% to 4.5%, as expected by the market. In its economic outlook, it raised its growth and inflation forecasts, and adjusted its policy rate forecast for next year from 3.4% to 3.9%.
Chairman Jerome Powell mentioned in a press conference that they would be more cautious about additional rate cuts, indicating an adjustment in the pace of monetary policy easing.
In the international financial market, the Fed’s decision was evaluated as a hawkish rate cut. As a result, U.S. Treasury yields rose, stock prices fell, and the dollar strengthened.
The Bank of Korea held a market situation inspection meeting chaired by Deputy Governor Yoo Sang-dae. Deputy Governor Yoo commented, “The FOMC results suggest that the Fed’s monetary policy easing could be significantly delayed.”
He added, “If external uncertainties combine with domestic political situations to excessively expand market volatility, we will do our utmost to promptly implement market stabilization measures.”