SEOUL — The South Korean received hit its lowest level in opposition to the U.S. greenback in practically 13 years on Thursday, opening at 1,299 received and weakening to greater than 1,300 in intraday buying and selling.
The final time the nation’s currency breached the 1,300-won threshold was in the summertime of 2009, towards the top of the global monetary disaster. The received additionally handed this threshold through the Asian monetary disaster of 1997-1998. South Korea’s export-driven economic system makes it notably delicate to situations within the global economic system, which have been deteriorating recently.
Choo Kyung-ho, the nation’s deputy prime minister and the minister of economic system and finance, warned of the necessity to forestall an extra decline of the currency at a meeting with different officers in Seoul on Thursday morning.
“If needed, we will make efforts to stabilize the market,” he mentioned, whereas additionally calling for labor reforms and honest compensation.
Inflation is rising in South Korea as policymakers within the United States are additionally struggling to include runaway consumer prices.
This week, the Bank of Korea, South Korea’s central financial institution, predicted the nation’s annual inflation charge would hit 4.5 p.c by the top of the yr, the best charge in 14 years, with elevated spending and rising commodity costs being contributing components.
In May, shopper costs within the nation jumped 5.4 p.c in contrast with the identical interval a yr earlier. It was the sharpest rise in over a decade, and got here at a second when South Koreans had been keen to spend cash after having lived underneath strict coronavirus social distancing guidelines.
The war in Ukraine has additionally performed a task, in accordance to the Bank of Korea, which mentioned in an announcement that sanctions on imports of Russian crude oil and petroleum merchandise have led to an increase in worldwide oil costs.
The central financial institution raised the bottom rate of interest by 1.50 to 1.75 p.c in May, and officers predict additional will increase sooner or later to fight inflation.