Updated May. 31, 2014 02:47
The won-dollar exchange rate fell to below 1,020 won for the first time since the 2008 global financial crisis. At the Seoul forex market on Friday, the won-dollar rate declined by 0.5 won from the previous day to close at 1,020.1 won.
The exchange rate stood at 1,018.0 won at market opening, down 2.6 won from Thursdays close, but it recovered the 1,020 won level soon thanks to a buying spree, which was suspected as a dollar-buying intervention by the financial authorities. As exporters continuously placed dollar sell orders, however, the rate fell to 1,019 won level again in the afternoon, before closing barely at the 1,020 won level. The won fell to below 1,020 won per dollar in midday trading, soaring its highest level in almost six years after Aug. 8, 2008 (intra-day low of 1,017.5 won).
The wons appreciation results from massive dollar influx stemming from Korea`s large trade surplus in recent months, as well as the weakening greenback amid drop in U.S. Treasury bond yields. Goldman Sachs expressed concerns that the wons appreciation seems to be overstated and has almost reached the record high of 2006, adding that with the lackluster pace of Koreas economic recovery, a further appreciation could aggravate the vulnerability of companies with high debt ratios.