September 06, 2022 10:24
The Korean won nosedived to W1,371.40 against the greenback on Monday, the lowest point since the global financial crisis.
The last time the won plunged to the W1,370 level was on April 1, 2009, when it closed at W1,379.50.
The won has now fallen 15.4 percent against the dollar so far this year and 5.6 percent or W73.10 over the past month alone.
The dollar continues to strengthen amid expectations that the U.S. Federal Reserve will raise the benchmark interest rate by another 0.75 percentage points this month.
The dollar drain from the forex market here was driven by Korea's record monthly trade deficit of US$9.47 billion in August.
"It seems that the dollar-buying spree is gaining momentum due to growing panic," said Moon Jung-hee at the KB Kookmin Bank. "We must brace for the possibility of the won dipping to W1,400."
The country's forex reserves have dwindled this year amid a rapid fall in currency holdings. According to the Bank of Korea, the country's forex reserves stood at $436.43 billion at the end of August, down $2.18 billion from a month earlier. They have shrunk a whopping $26.69 billion over the past eight months.
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