Korean currency rises to highest against greenback in 14 months

The Korean won-dollar rate has climbed to its highest in 14 months on the loose monetary policy of both the Japanese and European central banks. The rate in the domestic foreign-exchange market on Friday went up 9.9 won from the previous day to close at 1093.7 won, a 9.9 won rise. This is the highest closing number since Sept. 5 in last year (1098.4won).

The exchange rate on Friday rose as the greenback was strong in the global financial market. The European Central Bank (ECD) said in its monetary policy meeting on Thursday local time that the benchmark rate was frozen but that it would implement additional stimulus measures. Financial market players believe that the ECD’s quantitative easing to allay deflation worries are imminent.

Japan conducted additional quantitative easing suddenly in late October, triggering a weak yen. The movements in Europe and Japan have resulted in the relative strength of the U.S. dollar, thereby making the won-dollar rate surge.

The fall of the Korean currency`s value is partly attributable to the response by the Korean foreign exchange authorities to the current exchange rates. Bank of Korea Governor Lee Ju-yeol said on Friday that the central bank is not sitting on its hands at the weak yen, while a senior official at the Ministry of Strategy and Finance said on Thursday that the ministry would put the won and the yen in sync. Against this backdrop, experts believe that Korea is de facto taking part in the global FX war where each nation is pushing down the value of its currency.