Report: Won grew more volatile in JanuaryEver since Donald Trump took office in January and made comments that suggested the U.S. dollar was overvalued, the Korean won has gone through more volatility than most emerging-market currencies.
The won fluctuated by an average 0.65 percent, or 7.7 won (0.7 cents), a day last month, the Bank of Korea said Thursday, an increase from 0.51 percent, or 6 won, a day in December.
“Uncertainties in the new U.S. administration, including possible policy changes and comments suggesting the dollar is too strong, had mixed impacts on global currencies,” said Kwon Do-keun, a director at the central bank. “The U.S. dollar weakened in January while volatility in the currencies of emerging markets, including the won, has increased from it.”
The won’s average rate of fluctuation was even higher than that of India (0.16 percent), China (0.24 percent) and Indonesia (0.28 percent), and was on par with Russia’s 0.6 percent.
With the volatility, Korea’s currency strengthened 3.8 percent to 1,162.1 won against the dollar in January from 1,207.7 won in December. Less won per dollar suggests the Korean currency is stronger.
As of Wednesday, the exchange rate stands at 1,147.2 won per dollar. The euro and Japanese yen, too, have strengthened against the U.S. dollar since December.
“The currency’s volatility has risen due to various factors, including political uncertainties in Korea and the possibility of being labeled a currency manipulator by the United States,” said Lee Ha-yeon, an economist at BNK Securities. “Global currencies have been fluctuating after Trump’s decisions to criticize other countries for undervaluing their currencies and as he expands America’s protectionist policies.”
BY KIM YOUNG-NAM [firstname.lastname@example.org]
with the Korea JoongAng Daily
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