[Exchange Rate 1400 Won] The 1400 Won Barrier Broken by US Giant Step... After 13 Years and 6 Months (Update)

On the 22nd, when the won-dollar exchange rate surpassed 1,400 won, dealers were working in the dealing room of Hana Bank in Euljiro, Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Seo So-jeong] The won-dollar exchange rate has surpassed 1,400 won for the first time in 13 years and 6 months.

On the 22nd, the won-dollar exchange rate opened at 1,398.0 won, up 3.8 won, in the Seoul foreign exchange market, and then immediately broke through 1,400 won, setting a new high again.

The exchange rate exceeding 1,400 won is the first time since March 31, 2009 (high of 1,422.0 won) during the financial crisis, about 13 years and 6 months ago.

The U.S. central bank, the Federal Reserve (Fed), raised the base interest rate by another 0.75 percentage points on the 21st (local time), spreading market fears. The Fed has taken an unprecedented three consecutive giant steps, and with expectations of at least one more giant step this year, concerns about tightening are growing.

The foreign exchange authorities have been making various efforts to block the psychological resistance level of 1,400 won by moving from verbal interventions to actual interventions, but ultimately, as fears of U.S. tightening materialized, the 1,400 won level was breached.

Moon Hong-cheol, a researcher at DB Financial Investment, said, "At the recent FOMC, the pace of U.S. interest rate hikes accelerated further, and concerns about the intensity of tightening grew in the market, continuing the upward trend of the won-dollar exchange rate," adding, "Most currencies except the dollar are weak, and with no factors supporting won strength, market volatility is expected to expand further for the time being."