Korean Won-Dollar Exchange Rate Fluctuates in 24-Hour Forex Market Launch

As the foreign exchange market transitions to a 24-hour trading system, the won-dollar exchange rate is fluctuating around the 1,530 won mark.

According to the Seoul foreign exchange market, as of 9:30 a.m. on July 6, the exchange rate for the Korean won against the U.S. dollar is trading at 1,532.7 won.

The rate started at 1,527.60 won at 6 a.m. and has seen a slight upward trend since then.

Despite some easing of external uncertainties, the exchange rate, which had remained stubbornly high, dropped nearly 30 won on July 3, raising hopes for a shift in market sentiment.

With the dollar's strength somewhat diminishing, there is an increasing likelihood that exporters, who had been concerned about the rate rising to 1,600 won, will begin selling dollars, which could exert downward pressure on the exchange rate.

Starting today, the won-dollar foreign exchange market will operate 24 hours a day from 6 a.m. on Monday to 6 a.m. on Saturday, excluding weekends and January 1.

Deputy Prime Minister Koo Yun-cheol emphasized during his visit to the Hana Bank dealing room that the launch of the 24-hour foreign exchange market reflects the fundamentals of the Korean economy, confirmed by strong external soundness, record-high current account surpluses, and inclusion in the World Government Bond Index (WGBI), as well as high demand from foreign investors.

Min Kyung-won, an economist at Woori Bank, noted that while foreign selling in the domestic stock market and remittance burdens remain, the return of domestic companies' demand for won conversion is likely to prevent a one-sided increase in the exchange rate. However, he added that low-price buying by importers and foreign remittance demand will support the lower end of the exchange rate.