The won is strengthening amid the global economic slump, making it tougher for export-dependent Korean companies to do business.
A strong won makes Korean products more expensive to buy overseas than rival goods from Japan, China and other countries.
The Chosun Ilbo compared the present situation with three previous global recessions and found that this was the first time that the won strengthened to around 1,100 despite a global recession.
In 1998, just after the Asian financial crisis, the won plummeted from W951 to W1,398 against the dollar. In 2001, when the dot-com bubble burst, it weakened from W1,130 to W1,290. And in 2009, just after the demise of Lehman Brothers, it weakened from W1,102 to W1,276.
The Korean economy has been able to recover relatively quickly from such shocks due to soaring exports. For example, at an exchange rate of W1,000, Korean exporters make W100,000 for every $100 worth of products exported. But if the won weakens to W1,200 per dollar, they can make W108,000 even if they cut the price to $90, making them more competitive.
The won has strengthened 4.8 percent so far this year. "The won's strengthening amid the global economic slump is a totally new trend in the Korean financial markets," said Ha Joon-kyung at Hanyang University. "We can no longer rely on exports to drive economic growth as we used to do in previous recessions."