Korea won suffers second-steepest depreciation in December amid martial law turmoil

Korea Won Suffers Second Steepest Depreciation In December Amid Martial Law Turmoil

A bank manager checks 50,000 won banknotes at the headquarters of Hana Bank in Seoul, in this Sept. 25, 2023 photo. Newsis

A financial institution supervisor checks 50,000 received banknotes on the headquarters of Hana Financial institution in Seoul, on this Sept. 25, 2023 photograph. Newsis

The Korean received skilled one of many steepest depreciations globally in December 2024, pushed by political turmoil following the short-lived imposition of martial regulation, in line with information launched Sunday.

In accordance with the info by the Financial institution for Worldwide Settlements (BIS), the Korean native foreign money’s actual efficient change price (REER) reached 91.3 on the finish of December, down 1.99 factors from a month earlier.

REER measures the energy of a foreign money relative to a basket of different currencies, adjusted for inflation.

A studying beneath 100 signifies depreciation in comparison with the bottom yr, whereas a studying beneath the benchmark means the alternative.

Among the many BIS-listed 64 international locations, Korea’s December REER was the second-lowest level, trailing solely Japan’s 71.3.

The month-to-month decline of 1.99 factors was additionally the third quickest globally, following Brazil’s 3.94-point drop and Australia’s 2.37-point decline.

This marked Korea’s largest month-to-month REER loss in over two years, since a 2.92-point plunge in September 2022 in the course of the Legoland debt default disaster that triggered a company bond yield spike and credit score crunch considerations.

The received, which hovered round 1,370 received per U.S. greenback in November, plummeted to 1,442 received on Dec. 3 after President Yoon Suk Yeol declared martial regulation.

The foreign money additional weakened to 1,486.7 received by Dec. 27 as political instability endured.

„Political modifications sparked by the martial regulation imposition have drastically affected the international change market,“ Financial institution of Korea Gov. Rhee Chang-yong mentioned at a January press convention. „The won-dollar change price is increased than what we will count on based mostly on our financial fundamentals and the speed hole with the US.“ (Yonhap)

Přejít nahoru