South Korean won hits 25-month low against US dollar

The South Korean won has strengthened significantly, with the won-dollar exchange rate dropping to the 1,330 won level, marking its lowest point in approximately 25 months. This decline follows a period of high volatility where rates had previously climbed due to Middle East tensions and rising oil prices.

Key drivers for the won's appreciation include an increased supply of US dollars resulting from a boom in semiconductor exports. The influx of dollars from major exporters, such as SK hynix, has played a central role in lowering the monthly average exchange rate. Additionally, expectations of domestic economic growth and the Bank of Korea's monetary policy stance have supported the currency's strength.

The trend is also reflected in other currency pairs. The won-yuan exchange rate reached its lowest level in a year, and the won-yen fiscal exchange rate hit an 18-year low, driven by both the strong won and the relative weakness of the Japanese yen caused by Japan's economic slowdown and fiscal challenges.