As the value of the U.S. dollar rises to 1,500 won, it is affecting Korea’s economy. On April 5, in the Seoul foreign exchange market, the won-dollar exchange rate rose to 1,510 won, which is the highest level since the 2008 global financial crisis.

The biggest reason for the recent rise in the exchange rate is the continuing instability in the Middle East. As global affairs become unstable, investors tend to buy dollars more than usual because they view the dollar as a safe asset. In addition, as the United States says it will continue to maintain high interest rates, the value of the dollar is rising compared to the won.

The rise in the exchange rate is affecting the daily lives of Koreans. Because Korea relies mostly on imports for energy and raw materials, if the dollar becomes more expensive, the prices of products also go up. In particular, as public utility and fuel costs increase, there are concerns that people will reduce their spending.

Companies are also facing difficulties. Companies that import raw materials and use them to manufacture products are seeing their profits decline as costs rise significantly. Export companies are also unable to earn as much profit as before due to the global economic downturn.

The Korean government and the Bank of Korea say that they can intervene in the foreign exchange market, but they believe that they cannot easily stop the trend of a strong dollar. Experts say that since the high exchange rate is likely to continue, it is important for the government to manage prices well and for companies to prepare in advance.

원가영 강남포스트 학생기자  webmaster@ignnews.kr

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