The dollar was released, but it was not enough... The exchange rate also topped 1,540 won

The won-dollar exchange rate stayed in the 1,500-won range for 13 straight trading days, breaking the longest streak since the 1997 IMF Crisis. As the high-exchange-rate trend continued, with the intraday rate briefly topping 1,530 won, foreign exchange reserves fell by nearly $900 million in a month after market-stabilization measures by the authorities. Even with dollar supply, the exchange rate has not eased easily, raising concerns that the strong-won environment could last longer.
■ It broke through 1,530 won intraday
On the 4th, the won-dollar exchange rate closed at 1,529.7 won in the Seoul foreign exchange market, up 13.3 won from the previous trading day. The rate opened at 1,530.0 won and rose as high as 1,530.8 won during the session, moving above the 1,530-won level for the first time in about two months. Trading at the 1,530-won level began in March 2009, during the GFC, and this was the first time since then. It later broke through 1,540 won in night trading. Through that day, the exchange rate had remained in the 1,500-won range for 13 consecutive trading days. That surpassed the 11-day record set in February and March 2009 during the GFC, marking the longest period of high exchange rates since just after the IMF Crisis.
The rise in the exchange rate is being driven by geopolitical risks in the Middle East and foreign capital outflows. As tensions between the United States and Iran continued, international oil prices climbed into the high $90s per barrel, while the dollar strengthened amid a preference for safe-haven assets. The U.S. Dollar Index (DXY), which measures the dollar against six major currencies, is hovering above 99.5.
Foreign selling is also adding pressure on the won. So far this year, foreigners have posted net sales of more than 112 trillion won in the domestic stock market. Selling has continued as profit-taking after the market’s sharp gains and portfolio rebalancing have overlapped, and net selling has also continued for 19 straight trading days since the 7th of last month.
The burden on the authorities to stabilize the market is also growing. According to the Bank of Korea, foreign exchange reserves stood at $426.99 billion at the end of May, down $880 million from the previous month. The decline was attributed to foreign exchange swaps with the National Pension Service (NPS) and other market-stabilization measures.
Foreign exchange reserves had fallen to $404.6 billion in May last year before recovering, but they have recently fluctuated again. This year as well, the figures have moved up and down without showing a clear direction.
■ Unmoved despite verbal intervention
Market participants are paying close attention to the fact that the exchange rate has not eased much, even after verbal intervention by the authorities. Deputy Prime Minister and Minister of Finance and Economy Koo Yun-cheol said at the Market Situation Review Meeting that "we are closely monitoring the foreign exchange market and will take immediate action if necessary against excessive one-sided moves." However, the exchange rate briefly narrowed its gains before turning higher again and threatening the 1,530-won level.
Experts say the high-exchange-rate environment could continue for some time even if tensions in the Middle East cool. They note that high oil prices may persist even after the war ends, and uncertainty over U.S. trade policy remains, making it difficult for pressure on the won to ease quickly. Baek Seok-hyun, an economist at Shinhan Bank, said, "The offshore market has already formed a 1,530-won level, and the market is gradually reflecting the possibility that the U.S.-Iran conflict structure will be prolonged."
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imne@fnnews.com Hong Ye-ji Kim Tae-il Reporter