‘South Korean Won’ Best Performer Among Major Currencies
South Korean Won was the best performer among other major currencies in the world last month according to the global data released on Monday.
The South Korean Won rose 2.64 percent on months to 116.93 against US dollars in July. It is the fastest gain among the currencies of 27 leading economies in the world. Australia and Japan took the second and third spot with a 2.6 percent and 1.68 percent respectively. This data is according to the Real Effective Exchange Rate (REER) indices compiled by the Bank for International Settlements (BIS).
Analysts said that the rapid appreciation of South Korean Won is possible and may cause a delay in the United States' Fed rate hikes. Standard & Poor's (S&P) also raised South Korea's sovereign rating by one notch earlier this month, helping expand the inflow of foreign capital into Asia's fourth-largest economy.
However, there are concerns that the performance of won might affect the country's shrinking exports. South Korea's exports fell 10.2 percent last month that marks the 19th consecutive month of its declination.
"The price competitiveness of exporting firms is worried to weaken due to the won's strength," Lee Chang-sun, a senior researcher at LG Economic Research Institute, said.
The Bank for International Settlement has been monitoring the REERs of different countries every month by setting 2010 as its base year. The base was set at 100, if there's an increase it means an appreciation of the national currency adjusted by relative consumer prices.
South Korea's REER in the month of July is recorder as the highest since it posted 119.21 in December last year.
South Korea ranked 7th in the wider REER data coverage that cover 61 economies following Venezuela, South Africa, Brazil, Chile, Russia and Malaysia.
