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Korean Won Nears 16-Year Low Again as Dollar Demand, Overseas Investments Bite

The South Korean won has resumed its decline, falling for ten consecutive sessions and hovering below 1,470 won per US dollar, close to its recent 16-year low. Analysts attribute the weakness to strong dollar demand from importers and local investors funding overseas stock investments, with the currency also tracking the depreciation of the Japanese yen. Meanwhile, South Korean stocks traded higher, with the KOSPI hitting a new all-time intraday high led by auto and IT shares before paring some gains. The advance was led by Hyundai Motor and Hyundai Mobis, while semiconductor giants Samsung Electronics and SK hynix traded lower.

Key Points: Korean Won Weakens Near Multi-Year Low | Currency & Stock Update

  • Won falls below 1,470 per dollar
  • 10 straight sessions of decline
  • KOSPI hits intraday high before paring gains
  • Auto and tech shares lead advance
  • Semiconductor stocks trade weak
2 min read

Korean won again nears multi-year low amid increased overseas investment

South Korean won falls, nearing a 16-year low against the US dollar amid strong dollar demand for imports and overseas stock investments. KOSPI hits new high.

"Demand for dollars from importers and local investors for overseas stock investments has pushed the exchange rate higher - Min Kyung-won, Woori Bank"

Seoul, Jan 13

The South Korean currency fell further on Tuesday, hovering below the level of 1,470 won per US dollar shortly after recovering from a near 16-year low.

The won opened at 1,468.5 per dollar, down 0.1 won from the previous session, and dipped further to 1,472.45 won as of 9:30 am, reports Yonhap news agency.

The local currency had slid to a 16-year low of around 1,480 won in mid-December and rebounded above the 1,450 won mark on Dec. 24 for the first time in about two months following a verbal intervention and policy steps by foreign exchange authorities to stabilise the market.

The won, however, has since fallen for 10 straight trading sessions, closing at 1,468.4 won per dollar on Monday.

"Demand for dollars from importers and local investors for overseas stock investments has pushed the exchange rate higher," Min Kyung-won, an analyst at Woori Bank, said.

The won's weakness has also moved in line with the depreciation of the Japanese yen, he added.

Meanwhile, South Korean stocks traded higher late Tuesday morning, trimming early gains after hitting a new intraday high, led by auto and technology shares.

The benchmark Korea Composite Stock Price Index (KOSPI) added 21.07 points, or 0.46 per cent, to 4,645.86 as of 11:20 a.m.

After opening 0.81 percent higher, the index touched an all-time intraday high of 4,672.04 at one point.

Gains later narrowed as large-cap semiconductor shares turned lower.

Auto and information technology (IT) shares led the advance.

Top carmaker Hyundai Motor surged 11.58 per cent, and its auto parts affiliate Hyundai Mobis soared 15.74 per cent.

Internet giant Naver rose 1.17 per cent, and its rival Kakao edged up 0.17 per cent.

Game stocks were also strong, with NCSOFT jumping 6.71 percent and Netmarble increasing 0.92 percent.

However, semiconductors traded weak as industry leader Samsung Electronics fell 1.01 per cent and SK hynix lost 2.67 per cent.

- IANS

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Reader Comments

S
Sarah B
The KOSPI hitting new highs while the currency weakens is a fascinating contrast. It suggests strong domestic corporate performance can exist alongside external economic pressures. Hyundai's surge is massive! 🚗
P
Priya S
As someone who follows tech stocks, the divergence is telling. IT and auto shares up, but semiconductors down. Samsung and SK hynix falling while Naver/Kakao rise shows a shift in investor sentiment within the sector. Wonder if this pattern repeats in Indian markets with our IT stocks.
R
Rohit P
"Demand for dollars from importers and local investors for overseas stock investments" – this is the core issue. When our own citizens and companies prefer to invest abroad, it puts pressure on the local currency. We need to make domestic markets more attractive. Just my two paise.
V
Vikram M
The article mentions verbal intervention by authorities in December. It worked briefly, but the trend resumed. It's a reminder that short-term fixes don't address structural issues. A weak currency boosts exports (like Hyundai cars), but makes imports costlier. A double-edged sword.
K
Kavya N
Respectfully, the focus on daily fluctuations can be excessive. Currencies go through cycles. While 10 straight sessions of fall is significant, the broader economic fundamentals of South Korea remain strong, as shown by the stock market. We should avoid panic-reading into every dip. 📉➡️📈

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