Amid rising geopolitical tensions in the Middle East following Iran's airstrike on Israel, the Korean won's value surpassed the 1,400 won per dollar mark on the 16th, prompting foreign exchange authorities to intervene verbally to defend the exchange rate.
The Ministry of Economy and Finance and the Bank of Korea issued an urgent notice to the press on the same day, stating, "Foreign exchange authorities are closely monitoring exchange rate movements and foreign exchange supply and demand with heightened vigilance." They added, "Excessive concentration in the foreign exchange market is undesirable for our economy."
The message was distributed under the names of Shin Jung-beom, Director General of International Finance at the Ministry of Economy and Finance, and Oh Geum-hwa, Director of the International Department at the Bank of Korea.
On the same day, in the Seoul foreign exchange market, the won-dollar exchange rate rose to 1,400 won around 11:31 a.m. It is the first time in about 17 months that the won-dollar rate has entered the 1,400 won range during trading since November 7, 2022 (1,413.5 won), when the strong dollar was at its peak.
In the context of the ongoing strong dollar, the spread of risk-averse sentiment due to instability in the Middle East also contributed to upward pressure.
On the 13th, Iran launched drones and cruise missiles at mainland Israel in retaliation for attacks on its consulate. Although the international community, including U.S. President Joe Biden, who is seeking re-election in the upcoming November presidential election, is working to mediate the conflict, the possibility of escalation cannot be ruled out if Israel responds strongly.
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 Mun Ho-nam munonam@
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