(Seoul = Yonhap News) Reporter Kim Ji-yeon = The won/dollar exchange rate rose to the 1,380 won range on the 17th as the U.S. Federal Reserve raised the base interest rate and hinted at further increases, showing a hawkish stance (preferring monetary tightening).
On this day, the standard price of the Korean won to U.S. dollar exchange rate in the Seoul foreign exchange market at 3:30 p.m. was 1,382.2 won, up 13.6 won from the standard price at 3:30 p.m. the previous day (1,368.6 won).
As of 3:30 p.m., it has been three weeks since the 27th of last month (1,380.9 won) that the standard price exceeded 1,380 won. This is the first time since the 31st of last month that it hit the 1,380 won level intraday.
The exchange rate started at 1,377 won on this day and peaked at 1,384.5 won at 10:56 am.
As of 3:30 p.m., the exchange rate rose by 46.1 won over the past 6 trading days from the 10th.
At the Federal Open Market Committee (FOMC) meeting the day before, the Federal Reserve raised the benchmark interest rate by 0.25 percentage points (p) to 3.75-4.00% per year. This is the first monetary tightening measure in three years and two months since July 2023.
At a press conference, Federal Reserve Chairman Kevin Warsh emphasized the Fed's commitment to price stability, saying, "Inflation is too high and has persisted for too long." As unrest in the Middle East reignited, international oil prices exceeded $100 per barrel, raising concerns that this could lead to rising prices.
In particular, the possibility of additional increases within the year was also hinted at. According to economic indicator forecast data, the average year-end interest rate forecast of 18 out of 19 FOMC members was 4.1%, 0.3 percentage points higher than last June.
Kwon Min-soo, Deputy Governor of the Bank of Korea, said on this day, "The U.S. Federal Reserve's monetary policy stance is expected to be tight in the future," and "As monetary policy decisions in major countries such as Japan and the United Kingdom are scheduled this week, we will continue to closely monitor the domestic financial and foreign exchange market situation with special vigilance."
The dollar index, which shows the value of the dollar against the currencies of six major countries, exceeded the 100 mark at 100.161.
Moon Jeong-hee, chief economist at KB Kookmin Bank, said, “It appears that there has been some buying force (today) as the U.S. has raised interest rates and the Middle East issue has not been resolved.”
However, if the Bank of Japan (BOJ) raises the base interest rate and sends a hawkish message as expected at the financial policy decision meeting on the 18th, the yen will strengthen and the won will be linked to this, so there is a possibility that the won/dollar exchange rate will be put under downward pressure.
Chief Economist Moon explained, “If the Bank of Japan shows a hawkish stance, I think the yen will strengthen and the won/dollar exchange rate could fall below the 1,380 won line,” and depending on the oil price situation, “1,380 won is likely to become a resistance and support line.”
The yen/dollar exchange rate fell 0.63 yen to 155.63 yen.
The won/yen fiscal exchange rate rose 9.07 won to 888.24 won per 100 yen.
On this day, foreigners net sold close to 2.28 trillion won in the stock market, putting a burden on the exchange rate.
