South Korean won hits 17‑year low in real effective exchange rate

The Korean won's real effective exchange rate (REER) fell to 82.99 in June, the lowest level since March 2009, according to the Bank for International Settlements. The index dropped 1.75 points from May, indicating a loss of price competitiveness against major trading partners.

The decline came as the won weakened sharply against the U.S. dollar, reaching 1,555 won per dollar in intraday trading on June 30, its weakest level in more than 17 years. The monthly average of 1,527.95 won per dollar was the lowest since February 1998 during the Asian financial crisis. Heavy foreign selling of South Korean equities and strong dollar demand from domestic investors pressured the currency.

The currency slide contributed to a sharp fall in the Korea Composite Stock Price Index, which dropped 5.72 % to 6,690.62 after a three‑day rally, prompting a brief suspension of program trading on the Seoul bourse.