Seoul — Thursday’s Korean won hit a record low against the US dollar in nearly 13 years, opening at 1,299 won and dropping to more than 1,300 won during the day.
The last time the national currency exceeded the 1300 won threshold was in the summer of 2009 towards the end of the global financial crisis. Wong also crossed this threshold during the 1997-1998 Asian financial crisis. South Korea’s export-led economy is particularly sensitive to the recent deterioration of the global economy.
Deputy Prime Minister and Minister of Economy, Finance and Finance Choo Kyung-ho warned that further currency depreciation needs to be prevented. meeting Thursday morning with other officials in Seoul.
“We will strive to stabilize the market as necessary,” he said, calling for labor reforms and fair compensation.
Inflation is rising in South Korea as US policymakers are also struggling to curb runaway consumer prices.
This week, the Bank of Korea, the central bank of South Korea, predicted that the country’s annual inflation rate would reach 4.5% by the end of the year. This is the highest rate in 14 years, driven by higher spending and higher commodity prices.
Consumer prices in the country rose 5.4% year-on-year in May. This is the sharpest rise in more than a decade and has come to the moment when Koreans want to spend money after living under strict coronavirus social distance rules.
The war in Ukraine also played a role in the statement that sanctions on Russia’s crude oil and petroleum product imports led to higher international oil prices, according to the Bank of South Korea.
The central bank raised its base interest rate from 1.50 to 1.75% in May, and authorities predict it will raise it further in the future to combat inflation.