Will the US dollar-won average reach 1,420 this year?
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Synopsis
Economists forecast that the exchange rate of the South Korean won against the U.S. dollar will average 1,420 won this year amid rising intervention measures from financial authorities. With significant market shifts, this prediction holds considerable importance for businesses and the economy.
Key Takeaways
- Experts predict a year-end won-dollar exchange rate between 1,400 and 1,420.
- Financial authorities are increasing interventions to stabilize the currency.
- The year-end exchange rate impacts financial evaluations for businesses.
- The highest exchange rate on record occurred during the 1997 financial crisis.
- Recent stock market performance shows growth, especially in tech sectors.
Seoul, Dec 28 (NationPress) Analysts on Sunday identified the 1,420 level as the expected annual average for the South Korean won against the U.S. dollar, as financial authorities intensified their verbal interventions to halt the won's depreciation.
The won concluded trading at 1,440.3 against the dollar on Friday, marking its lowest point since November 4, according to data from Seoul Money Brokerage Services, as reported by Yonhap news agency.
In response to the won's decline, financial authorities have escalated their verbal interventions, causing the won to surge by over 30 won against the dollar at one point last week.
"We are observing the establishment of a new psychological resistance level, which is limiting the upward momentum of the won-dollar exchange rate. The government's stabilization measures are likely to significantly impact the market until year-end," stated Baek Seok-hyun, an economist from Shinhan Bank's S&T Center.
Baek anticipates that the won-dollar exchange rate will settle between 1,400 and 1,420 won by the end of the year.
Meanwhile, economist Lim Hwan-yeol from Woori Bank predicts a year-end exchange rate around 1,440 won, highlighting the possibility of export firms releasing their dollar reserves into the market.
The year-end exchange rate is crucial as it serves as a benchmark for businesses and financial institutions when assessing their foreign currency-denominated liabilities in financial statements.
The highest recorded year-end won-dollar exchange rate occurred in 1997 during the financial crisis, where the won was valued at 1,695 won per U.S. dollar.
In other news, South Korean stocks closed higher on Friday, buoyed by significant gains in major tech shares like Samsung Electronics and SK hynix. The local currency appreciated against the U.S. dollar as the country worked to stabilize the foreign exchange (FX) market.
The benchmark Korea Composite Stock Price Index (KOSPI) rose by 21.06 points, or 0.51 percent, concluding at 4,129.68.
Trade volumes were robust, with 502.7 million shares exchanged, amounting to 16 trillion won (approximately US$11.1 billion), with a ratio of losers to winners at 639 to 246.
Point of View
It is critical to acknowledge the significance of the ongoing currency fluctuations and the proactive measures taken by financial authorities. The projected average of 1,420 won against the U.S. dollar reflects the economic challenges and the strategic interventions aimed at stabilizing the market. This situation demands close monitoring as it influences both local businesses and the broader economic landscape.
NationPress
29/12/2025
Frequently Asked Questions
What is the current exchange rate of the won against the U.S. dollar?
As of December 28, the won closed at 1,440.3 against the U.S. dollar.
What are the predictions for the won-dollar exchange rate by year-end?
Experts forecast the exchange rate will range between 1,400 to 1,420 won.
Why is the year-end exchange rate significant?
It serves as a benchmark for companies and financial institutions to evaluate foreign-currency-denominated liabilities.
What historical context is there for the won-dollar exchange rate?
The highest recorded year-end rate was 1,695 won per U.S. dollar in 1997 during the financial crisis.
How have South Korean stocks performed recently?
South Korean stocks ended higher, fueled by gains in major tech shares, with the KOSPI index rising by 21.06 points.
