Posted November. 18, 2004 22:56,
As Korean Won to US Dollar exchange rate decreased by its greatest drop of the year to 1,060 won. Lee Hun-jae, the deputy prime minister and the minister of finance and economy, implied the possibility of intervening in the foreign exchange market by saying, We will make actions when it is necessary.
On November 18, the won-dollar exchange rate ended at 1,065.4 won to the dollar. It had dropped by 16 won compared to the previous day.
It is the lowest exchange rate since November 21 of 1997, when the exchange market ended at 1,056 won to the dollar. It is the biggest drop since September 22 of 2003 (when it dropped by 16.8 won).
Within a month, the exchange rate for the won to the U.S. has dropped by 79.4 won.
Although, Deputy Prime Minister Lee said during a talk with foreign reporters that the government will not remain a spectator when the exchange market fluctuates due to speculative factors, the government could not keep the exchange rate from dropping.
A main factor of the sudden decrease in the exchange rate was U.S. Secretary of the Treasury John Snows speech during the Global Economic Briefing in London. During the briefing, John Snow implied the U.S. governments plan is to look at the decrease in dollar value by saying, Non-market intervention into the exchange market was not effective. After the saying was made, the value of dollar dropped to 1.3048 dollars to the Euro, the lowest ever rate, at one point.
Manager Goo Gil-mo from the foreign currency application team of the Foreign Exchange Bank said, Today, the exchange rate for the yen to the U.S. dollar has dropped to 103 yen on the Tokyo exchange market. Moreover, as the enterprises sold their dollars they received from exports, the exchange rate dropped even greater. The exchange rate for the won to the U.S. dollar might even drop to 1,050 won to the dollar.
In the meantime, in New York futures, the clearing price of gold for delivery in December went up by 4.6 dollars, ending at 445.1 dollars per ounce (1 ounce equals 28.35g). It is the highest price since the July of 1988. The price of gold has increased by 9.4 percent in last three months.