Weakened Dollar… Dropped Exchange Rate

The exchange rate of the won dropped by 10.3 won from the previous day and ended at 1,278.2 won yesterday at the Seoul Foreign Currency Exchange Market. The sharp fall in the exchange rate of the won was due to the weakening value of dollar against major foreign currencies such as yen.

The exchange rate of the won once dropped to as low as 1,275 won, which was 13.5 won lower than the previous day, marking the record low since the fifth months. However, the exchange rate of the won climbed up a little bit since the government-run bank began to buy dollar.

Prior to this, the exchange rate of the yen dropped to 119.68 yen from 121.82 yen of the previous day, breaking the 120-yen line within two months on Wednesday. The exchange rate of the yen was 119.4-120.25 yen against dollar at the Tokyo Foreign Currency Exchange Market. The euro also rose from 0.9034 to 0.9150 of the previous day on Wednesday, and it was exchanged at 0.9133-0.9203, the record high in the fifth months, at the Tokyo Market yesterday.

Market experts said that following the bleak economic forecast for the U.S. economy, including the IMF`s warning of the fall of the value of the dollar, the outlook for the dollar is changing from the `maintenance of strong dollar` to the `slackening dollar`.

Cho Moon-Gi, chief of the foreign currency exchange management team at the Bank of Korea, forecasted that the fall of the dollar would be limited, saying that ``as the world economy is weakening, the value of the yen or the euro will not rise. The Financial Times also reported yesterday that ``since Japan`s economy is export-oriented, Japan would not want the strong yen, which will not be helpful for the recovery of economy.``

Meanwhile, Lee Jung-Tae, foreign currency exchange dealer at the Foreign Exchange Bank, forecasted that the exchange rate of the yen against dollar would be between 118-123 yen, and the exchange rate of the won against dollar would be between 1260-1290 won.

Lee Na-Yeon larosa@donga.com