Korean Won Strengthens on Robust Exports and Increased Dollar Supply

The Korean won has shown significant strength against the U.S. dollar, trading at an average of 1,342.6 won per dollar in early October, the lowest rate since September 2024. This positive trend is attributed to robust exports and an increase in dollar supply, as indicated by data from the Bank of Korea.

In recent months, the won's exchange rate has steadily improved, with exporters actively selling dollars in the market. Following a peak of 1,528 won per dollar in June, the currency has strengthened, reaching 1,328.9 won as of last Friday.

Experts attribute this appreciation to South Korea's trade surplus, which averaged nearly $2.5 billion daily in September. Additionally, the semiconductor sector's boom has contributed to this favorable exchange rate, according to economist Baek Seok-hyun from Shinhan Bank.

The International Monetary Fund has also raised South Korea's growth forecast to 3.3% for 2026, highlighting the resilience of the economy despite global challenges. The Bank of Korea's recent interest rate hikes further support the won's strength, with expectations of continued stability in the low- to mid-1,300 won range through the year's end.

However, analysts caution that geopolitical risks and fluctuations in oil prices may introduce volatility in the exchange rate, as noted by Hana Bank analyst Lee Yoo-jung.