Measures will be taken to stabilize the exchange rate when “exceptional” moves occur, Kim Yi Tae, director of foreign exchange at the Ministry of Strategy and Finance, said the same day.At 1150 won per dollar, it's much closer to what it should be than, say, back in 2008 when it shot up to 1600 won or so for no good reason. Still, I always thought 1000 won or so would be a more natural rate (though wouldn't it be wonderful if it came down to 800 won per dollar again?).
“The government is allowing the won to gain somewhat as it is wary that U.S. pressure on China to appreciate its currency will spill over to Korea,” said Seo Jeong Hun, chief economist at Korea Exchange Bank in Seoul. “Economic fundamentals and strong exports give the won more room to strengthen in the long- term.”
Wednesday, September 29, 2010
KRW at four-month high
That's good news for those of us who get paid in Korean won, which still includes me. And the trend may continue, but it depends on factors like (I think) the appreciate of the yuan:
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And it's bad for new teachers converting their dollars into won, and it may also be bad for people who don't want to get rid of their wons just yet (is this a peak or new plateau?). Exchange rates are fun.
ReplyDeleteMy advice for the newcomers would be to just bring in enough money to cover expenses until you get paid, plus maybe a little extra. If the dollar is weaker, then rely on your KRW.
ReplyDeleteFor the other group, I would say that 1150 is not a bad price to sell KRW at. It could go lower, but the amount it will go lower (say, 1100 or even 1000) is not going to be that much more substantial to warrant the risk that international investors will have another collective brain fart and shoot the KRW back up to 1600 won again.
Watch for announcements of any appreciation of the Chinese yuan. If it appreciates, then that gives room for the KRW to strengthen to its more natural rate.
My caveat here:
I am merely a gut feeler. I am not a prognosticator nor am I a financial adviser. None of what I'm saying here warrants a guarantee of any kind.