South Korean Won Hits 17-year Low

The South Korean won crossed 1,500 per US dollar, its weakest level since March 2009, despite government pledges to curb excessive volatility. The decline highlights the pressure on Asian currencies as the Iran war persists, with higher oil prices and stalled peace talks driving capital reallocation. External factors, including a sharp rally in domestic stocks prompting foreign investors to rebalance portfolios, have also weighed on the won. Meanwhile, data this week showed South Korea’s inflation rate surged in May to its highest level in over two years, while exports grew more than expected to a record $87.75 billion, fueled by a global AI investment boom that pushed chip sales to new highs. Finance Minister Koo Yun-cheol stated that authorities are closely monitoring FX markets "with a high degree of vigilance to prevent anxiety from spreading" and vowed to take "prompt, necessary measures" in case of excessive market moves. The won has lost over 6% of its value this year.

The South Korean Won touched 1539.00 against the USD, the lowest since March 2009. Over the past 4 weeks, US Dollar South Korean Won gained 4.75%, and in the last 12 months, it increased 13.52%.

The South Korean won fell to around 1,535 per dollar, extending losses to its weakest level since March 2009, as renewed Middle East tensions boosted oil prices and supported demand for the US dollar. Investors turned cautious amid reports that Iran struck Kuwait International Airport and Israel signaled readiness, alongside the US, to carry out further strikes if necessary. The escalation lifted Brent crude toward $98 per barrel, raising concerns over potential supply disruptions in the Gulf and worsening South Korea’s external balance given its heavy reliance on energy imports. The currency also faced pressure from sustained foreign equity outflows, with investors net selling about 2.5 trillion won worth in local shares. However, losses were partially contained after Finance Minister Koo Yun-cheol said authorities would take “immediate measures” to curb excessive FX volatility, reinforcing expectations of intervention as the won remained near psychologically important levels.