South Korean Won

Evolution of the KRW Exchange Rate

The South Korean Won (KRW) exchange rate has shown a significant evolution over time. In the early 2000s, the exchange rate was relatively stable, with the KRW trading at around 1,000 per US dollar. However, during the 2008 global financial crisis, the KRW experienced a sharp depreciation, reaching around 1,500 per US dollar. Since then, the exchange rate has been subject to fluctuations, influenced by global economic conditions and domestic factors.

Variations in the KRW Exchange Rate

The KRW exchange rate has demonstrated various variations throughout its history. Factors that influence these variations include economic fundamentals, such as inflation, GDP growth, and interest rates, as well as geopolitical events. For example, during times of economic uncertainty, the KRW tends to depreciate as investors seek safer assets. Additionally, changes in monetary policy by the Bank of Korea also impact the exchange rate.

Significance of KRW in the Global Economy

The South Korean economy, as the 11th largest in the world, plays a crucial role in the global economy. The KRW exchange rate is important as it affects South Korea's export competitiveness. A weaker KRW can make Korean goods more affordable to foreign buyers and boost exports. Furthermore, South Korea is home to several global multinational corporations, whose activities and transactions are impacted by the KRW exchange rate.

Shocks Experienced by KRW and Correlation with Other Currencies

Over the years, the KRW has been subject to various shocks, both domestic and external. These shocks include geopolitical tensions, such as those with North Korea, as well as global economic downturns. The KRW has also shown correlation with other currencies, particularly those in the East Asian region. For example, it has a strong positive correlation with the Japanese Yen (JPY), as both economies heavily rely on exports. Additionally, the KRW exchange rate can be influenced by the US dollar (USD) as it remains a dominant currency in global trade and financial markets.