The dollar/won exchange rate has hardly fallen. In the second half of last year alone, it was widely expected that the dollar/won exchange rate would gradually decline as the U.S. tightening monetary policy stance would end this year and Korea’s exports would rebound due to base effects.
However, this outlook has not been realized until the end of the first quarter. In the first quarter, the dollar/won exchange rate rose from 1,288.0 won to 1,347.2 won at the end of last year, with the won depreciating 4.4% against the dollar, and there is still no sign of a decline in April. Meritz Securities published an interesting report on this.
In this report (The reason why the outlook for the foreign exchange market has become difficult: Open questions), the author introduced the situation in which the opposite phenomenon is taking place, and suggested three hypotheses for the reason why it happened, although the existing indicators should be strong. As the author pointed out, the report does not confirm conclusions and provides readers with the opportunity to consider these hypotheses together.