Won-Dollar Exchange Rate

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The exchange rate between the Korean Won and U.S. Dollar has plunged to its lowest level in three months in the wake of Donald Trump's inauguration, putting Korean businesses on high alert. Let’s find out more.

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The won-dollar exchange rate, which rose three won the previous day, nosedived 12 won as soon as the market opened. Although the market managed to buffer the plunge, the won-dollar exchange rate closed at 1,158 won per dollar, the lowest level in 83 days.

[Soundbite] Seo Jung-hoon(KEB Hana Bank) : "The currency exchange rate soared on the strong dollar, but then all of a sudden plummeted rapidly."

The higher value of the Korean currency is a stumbling block for export businesses, because it inevitably undermines price competitiveness. Analysts say that a decrease in the exchange rate by just a hundred won results in quarterly losses of hundreds of billions of won for major manufacturers such as Samsung Electronics.

[Soundbite] Lee Chang-seon(LG Economic Research Inst.) : "If the U.S. goes for protectionism and the foreign currency fluctuations intensify, businesses will have a hard time predicting the future, while export conditions will deteriorate."

If Chinese exports to the U.S. hit a snag due to the escalating currency war between the two nations, Korean exports of intermediary materials to China will inevitably suffer a blow.