[News in Numbers] Exchange Rate Surpasses 1400 Won, How High Did It Rise in 1997, 2008, and 2022?

The won-dollar exchange rate has surpassed the 1,400 won mark again for the first time in two years. Although the government hastily intervened verbally to stabilize the market, some are opening the upper limit to 1,500 won.

This is the fourth time in history that the exchange rate has exceeded 1,400 won, following the 1997 foreign exchange crisis, the 2008 financial crisis, and the 2022 US interest rate hikes.

After President Trump's re-election, the three major U.S. stock indices in New York have been hitting record highs day after day. Meanwhile, on the 12th, the KOSPI fell more than 30 points in early trading, and the won-dollar exchange rate rose above 1,400 won. Various indices are displayed on the electronic board in the dealing room of Hana Bank in Euljiro, Seoul.

Until October 1997, the exchange rate had maintained the mid-900 won range, but it sharply rose right after the government announced in November that it had officially requested a bailout from the International Monetary Fund (IMF) to overcome the severe foreign exchange crisis. The exchange rate quickly surpassed 1,100 won within a month and soared without braking until the end of that year, eventually reaching 1,964.8 won (based on the Seoul Foreign Exchange Brokerage official rate) on December 24.

Afterward, the exchange rate continued to fluctuate wildly for some time. It dropped from the 1,900 won range to the 1,400 won range within five days, then surged past 1,800 won again in January 1998. The exchange rate volatility persisted until the second half of the year, when it stabilized around the 1,200 won range, but it again surpassed 1,400 won in September of that year. By the early to mid-2000s, the won-dollar exchange rate had fallen to the 900 won range.

The next time the 1,400 won level was breached was about ten years after the foreign exchange crisis, during the 2008 global financial crisis. At that time, the exchange rate rose to 1,420.3 won on October 10 and then fluctuated sharply, reaching 1,509.0 won on November 24. On March 3, 2009, it peaked at 1,573.6 won before steadily declining thereafter.

Although not as high as during the foreign exchange and financial crises, the exchange rate surged again in 2022, surpassing 1,400 won. Due to the impact of US interest rate hikes, the exchange rate rose to 1,434.8 won on September 30 and remained in the 1,400 won range for about a month and a half before gradually falling.

Experts analyze that the recent breach of the 1,400 won level is due to the strong dollar following the inauguration of the second Trump administration. Some suggest that, given the significant policy uncertainties in the US, there are no factors to ease the strong dollar trend, indicating the possibility of further exchange rate increases.

The exchange rate stayed in the 1,370 won range on the 5th, just before the US presidential election, but after former President Donald Trump was elected, the dollar showed extreme strength and the exchange rate has been rising daily. On the 13th, the weekly closing price (3:30 PM) of the won-dollar exchange rate in the Seoul foreign exchange market rose by 3.1 won to 1,406.6 won, the highest in two years since November 2022.