The dollar slid to 1,071.2 won on Thursday, posting its lowest level in 32 months against the Korean currency.
The Korean currency’s value rose by 8.3 won from a day earlier, bringing it to its highest point since Aug. 22, 2008, when it stood at 1,062.5 won per dollar.
Economists attributed the won’s rise in value to U.S. policymakers’ stance which hinted at easing ― or a wait-and-see approach toward tightening ― its monetary policies.
The won has been strengthening rapidly, recently pushing the exchange rate to below the level of 1,100 won per U.S. dollar.
In the past, such a rapid gain would have invited intervention immediately. A strong won was an anathema to top Korean economic policymakers who wanted to generate high rates of growth by promoting exports.
But the government has not even hinted at intervening in the market either in word or deed, giving the impression that it is tolerating a strong won as an antidote to inflation.
Experts say a strong won is undoubtedly a forceful tool with which to fight inflation, but will be even more effective when it works with a rise in the central bank’s benchmark rate.
By Kim Yon-se (
kys@heraldcorp.com)
