A Dollar〓1182Won, Lowest Recorded Exchange Rate in the Year. Slump 9.2Won Yesterday Government “Stabilization” Measures

Once again the value of dollar has dropped in the foreign exchange market (Increase of the Won value). The dollar won exchange rate has drop to 1190Won per dollar.

When the exchange rate had dropped by 20Won within two days, the Department of Foreign Exchange plans to put 5,000 billion won worth of foreign exchange stabilization bond on the bid to gather a fund for dollar purchase.

On the July 9th, the Seoul foreign exchange market has closed for the day with the dollar/won exchange rate recording 1182.2Won. This is lowest recorded value of the year. It is 9.2Won lower than the previous day.

The current decrease in dollar exchange rate is lowest since November 22nd 2000 (1176.9Won) and has dropped from its annual peak value (1332.0Won) by 149.8Won (11.2%) within three months. The dollar-won exchange rate began the day in the market with a downward trend, as there were no dollar buyers but many sellers. During the afternoon market, Lee Ghi-ho, Presidential Economy Advisor has mentioned that, “the government will not interfere in the foreign exchange market” in his gathering with the foreign corporate. After this unofficial comment, some foreign investment capital worth more than 1.5 billion dollars was let loose in the exchange market. At onetime the xchange rate slumped by more than 10Won.

When the comment of the advisor caused a major panic in the exchange market, the Ministry of Finance and Economy quickly stepped in and calm the market by announcing that the government will prepare stabilization measures for the exchange market. The slump in exchange rate has softened after the ministry’s announcement.

Sang-Chul Kim sckim007@donga.com