South Korean Won Gains 8.81% in July Against Dollar, Biggest Monthly Rise Since March 2009

The South Korean won rose 8.81% against the dollar in July, its biggest monthly appreciation since March 2009. The dollar was quoted at 1,424 won as of 3:30 p.m. in Seoul on July 31, down 125.4 won, or 8.81%, from 1,549.4 won at the end of June. That was the steepest monthly decline in the exchange rate since March 2009, when it fell 150.5 won as volatility surged during the global financial crisis. The exchange rate climbed as high as 1,559.2 won intraday on July 1. It reversed course two days after nearing the 1,560-won level, dropping by more than 30 won in a single day to the low-1,500 won range. The decline then continued through July. The exchange rate rose on only five trading days during the month. From July 27 to July 31, the rate fell 42.6 won. That was the biggest weekly decline since Nov. 7 to Nov. 11, 2022, when it dropped 100.8 won, the largest such fall in about three years and eight months. The dollar also touched 1,418.0 won intraday on July 30, the lowest level since Oct. 20, 2025, or nine months earlier. It later pared some of the decline and finished at 1,435.5 won on July 31. Improved dollar supply and demand conditions appear to have supported the won. The effect of foreign investors' stock rebalancing eased, while funds tied to SK Hynix's American depositary receipt issuance and dollar selling by exporters also entered the market. Intervention by foreign-exchange authorities in South Korea, the US and Japan also underpinned the won's strength. Still, the drop in the exchange rate fueled retail demand to buy dollars at lower levels. Individual customers at South Korea's five major commercial banks converted $285 million of won into dollars last month, compared with $164 million in June. That marked an increase of about 74% in a month. Some in the market expect the exchange rate to fall below 1,400 won before year-end. Dollar supply and demand, cited as a driver of won weakness, have improved. The interest-rate gap between South Korea and the US is also narrowing as the Bank of Korea raises its benchmark rate. Experts also said the exchange rate could rise again if the Federal Reserve increases interest rates further, domestic stocks retreat and South Korean retail investors expand purchases of US shares.