One Dollar = 1,057 Won

The won fell against the U.S. dollar to the 1,050 won level (a bullish won) for the first time in seven years.

On Thursday, November 25, the won-dollar exchange rate in the foreign exchange market dropped by 9.4 won from the previous day and closed at 1,057.2 won.

This is the lowest figure since the 1,056 won per dollar level on November 21, 1997.

Kim Seong-soon, head of the fund application division at the Industrial Bank of Korea, said, “The yen-dollar exchange rate, which closed at 102.79 yen the previous day with the lowest figure ever this year, seem to have affected highly. The foreign exchange authority intervened in the market, but export companies brought out their dollars received as loans for sale, and so we could not stop the exchange rate from falling.”

Foreign exchange experts forecast that even with the authorities announcing their volition to defend the exchange rate, the country cannot go against the worldwide trend for the weak dollar, and so the fall in won-dollar exchange rate will continue on for the time being.

Noh Sang-cheol, head of the foreign currency fund department at Kookmin Bank, said, “The 1,050 won per dollar mark is coming into visible range. The 1,000 won mark could possibly be threatened according to the change in the yen-dollar exchange rate.”

JP Morgan, a U.S. investment bank, forecasted the yen-dollar exchange rate to be 100 yen at the end of this year, and the rate falling to 94 yen per dollar in June next year.

Cheol-Yong Lee lcy@donga.com