[Asia Economy Reporter Seo So-jeong] The KRW-USD exchange rate closed lower on the 18th.
According to the Seoul foreign exchange market on that day, the KRW-USD exchange rate closed at 1,237.4 won, down 1.3 won from the previous trading day.
The exchange rate opened at 1,239.0 won, up 0.3 won from the previous day, and showed a stable trend in the high 1,230 won range in the morning ahead of the Bank of Japan (BOJ) monetary policy meeting announcement.
However, around noon, the exchange rate turned upward following the BOJ's announcement to maintain its large-scale monetary easing policy. Some speculated that the BOJ might revise its ultra-low interest rate policy by adjusting the fluctuation range of the 10-year government bond yield, as it did in last month's meeting, but the existing monetary policy was maintained.
Following the news of maintaining the existing monetary policy, the KRW-USD exchange rate surged intraday to as high as 1,246.5 won.
Oh Chang-seop, a researcher at Hyundai Motor Securities, explained, "The exchange rate was influenced by the BOJ issue today," adding, "With the uncertainty over BOJ's monetary policy resolved and relief spreading in the market that it has not shifted to tightening, the exchange rate fully reversed the intraday gains."
On the same day, Lee Chang-yong, Governor of the Bank of Korea, said at a press conference with the Seoul Foreign Correspondents' Club in the afternoon, "I believe today's BOJ decision was anticipated by the market," and added, "BOJ Governor Haruhiko Kuroda recently stated several times that Japan's inflation rate is not structural, so they will maintain monetary easing policy." Governor Lee also said, "If interest rates rise in April, in principle, as Japan raises rates, Japanese funds that had gone overseas will return domestically, and many countries are paying attention to what impact this will have," adding, "Even if Japan raises rates, the interest rate gap is so large that, cautiously, I think the impact on capital outflow will be limited for the time being."
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