The won on Wednesday rose to its highest point since the financial crisis in 2008. The won closed at W1,041.4 against the greenback, up W10.8 or one percent from the previous day and the strongest in five years and eight months.
The influx of foreign investment is the major driver. Foreign investors bought stocks worth over W340 billion in the Korean stock market on Wednesday. In the last 11 working days, foreign investors spent W2.57 trillion in straight purchases.
Experts predict that won will rise even further, citing a general weakening of the U.S. dollar and strong performance of Korean economy.
Korea has posted a current account surplus for 24 months in a row, and its foreign currency reserves exceed US$350 billion.
Minister of Strategy and Finance Hyun Oh-seok said, "We are observing volatility rather than significant changes in the exchange rate," hinting that the government has no plan to intervene for the time being. He added the impact of the exchange rate on Korean exports is "smaller than before."