Won swing highest in four years
According to the Bank of Korea the won-dollar exchange in the first three months on average moved up and down between 8.2 won. That’s the biggest fluctuation that the won-dollar has seen since the fourth quarter of 2011 when the daily movement was 9.3 won.
Korea was the eighth highest country that saw the steepest fluctuation among G20 countries. Compared to the previous day, the won moved up and down 0.54 percent on average. Russia took first spot with 1.44 percent followed by South Africa with 1.08 percent and Brazil at 0.99 percent.
At the beginning of the year the won sharply depreciated to as much as 1,214 won against the dollar due to global uncertainties including the unstable Chinese financial market and the continuous fall of crude prices. However, the won soon appreciated below 1,200 won after the Japanese central bank announced that it was adopting a negative interest rate in trying to erect its economy. It then saw its value plummet to the lowest point in nearly six years or 1,238.8 won against the dollar as foreigners pulled out their investment in bonds.
The won again appreciated to 1,143.5 at the end of March largely thanks to rising crude prices, improvement in the global stock market and the U.S. Federal Reserve deciding to go slow on its interest rate hike.
The won appreciated 2.5 percent to 1,143.5 won in the first half compared to the previous quarter. That was the second lowest appreciation among 15 economies including Japan, China and India. Japan saw its currency value devalue 7.4 percent. Among the four countries whose currency appreciated in the first three months of the year, the British pound was largely affected by the fear of exiting the EU, while Argentina’s peso lost its appeal over a national default crisis.
In the first quarter, the daily transaction of foreign exchange amounted to 24.7 billion won, compared to the last three months of last year with 22.6 billion won.
Meanwhile, in a report by the Korean Central Bank, foreign investors’ investment in Seoul shrunk for the second consecutive year. Last year foreigners invested $939.6 billion, which is a 5.5 percent decrease from $994.4 billion made the previous year.
The U.S. remained the biggest investor in Korea accounting for 26.8 percent or $252 billion. However, while the U.S. may still remain as the largest foreign investor in Korea, it shrunk compared to the previous year whereas investment from China, which accounts for 5.1 percent, increased nearly 10 percent during the same period to $47.6 billion.
BY LEE HO-JEONG [firstname.lastname@example.org]