The value of Korean won fell by the biggest margin among G20 member countries in April following Turkey, which is facing the risk of a financial crisis. Although many currencies are experiencing depreciation due to a strong U.S. dollar, concerns about the sluggish Korean economy appear to have led to a plunge in won’s value.
According to Bloomberg News on Wednesday, the Korean won fell 2.9 percent against the dollar last month. Aside from Turkey, whose dwindling foreign reserves have raised a possibility of a financial crisis, Korea is the country that had the highest depreciation rate of its currency. The Korean won-dollar exchange rate, which stood at 1135.1 at the end of March, jumped to 1168.2 at the end of April.
Argentina, troubled by its unstable financial market like Turkey, was the only country that experienced the similar drop in its currency value as Korea. Other countries, such as Japan, China, and Brazil, did not experience much depreciation of their currency value.
The global financial market is being affected by a strong U.S. dollar. But experts think that the won-dollar exchange rate is hit particularly hard by a strong dollar as investors at home and abroad are serious about the economic slowdown of Korea. “The economic slowdown has taken a toll on the value of won,” said Kim Yong-joon, chief of foreign exchange team at the Korean Center for International Finance.
Korea is seeing a continued decrease in export volume. The Ministry of Trade, Industry, and Energy said on Wednesday that the country’s export volume fell to 48.86 billion dollar last month, a 2 percent drop from a year ago. Korea’s export growth has been on the decline for five consecutive months since December of last year.
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