S. Korean won hits 18-month high to U.S. dollar in Jan.
Published : 2013-02-06 09:57
Updated : 2013-02-06 09:57
The South Korean currency hit an 18-month high against the U.S. dollar last month following monetary easing by economic powerhouses, data showed Wednesday, sparking concern over exporters' profitability.
The local currency changed hands at an average of 1,066.54 won against the greenback in January, the highest since July 2011, according to the data by the Korea Center for International Finance. Its previous monthly high against the dollar was 1,047.11 won quoted in August 2008.
The won gained 8.3 percent to the greenback in the second half of 2012, the data showed.
Market watchers said the won has moved up to a level too high for exporters to avoid foreign exchange losses.
A survey by the Korea Chamber of Commerce & Industry showed exporting companies believed they would suffer foreign exchange losses if the local currency rises above the 1,086.20 won level.
Analysts forecast exporters to log poor results in the first quarter of this year as a stronger won hurts their competitive edge against global rivals.
To make matters worse, the rapid depreciation of the Japanese yen has also become a major burden for South Korean exporters.
The yen weakened to a 31-month low against the dollar last month, falling 13.9 percent since Prime Minister Shinzo Abe first unveiled his government's resolve for an aggressive easing monetary policy in September last year, the data showed.
Analysts pointed out although the won's gaining pace has slowed after Seoul gave firm indications on market intervention to curb the won's ascent, the weakening yen is still feared to undermine exporters' performances.
"Non-eurozone countries in Europe have been bracing against their own exchange risks coming from a weaker euro through increasing foreign reserves. The government should take that into account," said Bae Min-geun, an economist at LG Economic Research Institute. (Yonhap News)