Dollars at the Counterfeiting and Forgery Response Center of Hana Bank Headquarters in Jung-gu, Seoul. yunhap news
As the US Federal Reserve (Fed) pulled out an early tightening card, the won/dollar exchange rate exceeded 1,200 won. It is expected that the US dollar will continue to strengthen for the time being as the US may start raising the key interest rate as early as March.
According to the Seoul foreign exchange market on the 6th, the won/dollar exchange rate closed at 1201.0 won, up 4.1 won from the previous trading day. On that day, the exchange rate started at 1200.9 won, up 4 won, and surpassed 1,200 won at the same time as the opening. It is the first time in three months since October last year that the won-dollar exchange rate has exceeded 1,200 won, and based on the closing price, it is the first time in about a year and a half since July 24, 2020 (1201.50 won).
Recently, the US Federal Reserve (Fed) has shown a so-called hawkish (tightening) movement, suggesting an early interest rate hike and an early reduction in the size of assets held, and the won-dollar exchange rate is strengthening day after day.
According to the minutes of the December FOMC (Federal Open Market Committee) regular meeting released on the 5th (local time), members of the FOMC said, “There may be justification for raising the benchmark interest rate earlier or sooner than previously anticipated.” did.
In a dot chart released after the FOMC’s regular meeting in December last year, the Fed hinted at the possibility of three key rate hikes this year. The won-dollar exchange rate is rising rapidly as the risk-aversion sentiment grows in response to the Fed’s early notice of tightening.
The prospect of a first rate hike in March this year, when the Fed is ending its tapering (reduction in asset purchases), is weighing on the prospect of a rate hike sooner than expected. .
First Vice Minister of Strategy and Finance Lee Won Lee said at a briefing at the Central Emergency Economy Headquarters meeting in the morning of the same day, saying, “At the beginning of the year, the prospect of the US Federal Reserve raising interest rates early has spread, and the dollar is showing an overall strength against the won and other major currencies.” explained that
“The market seems to be very interested in the possibility of an early interest rate hike and a shrinking balance sheet, especially when the Fed’s December FOMC minutes came out last night,” he added.
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