Korean Won Hits 17-Year Low as Dollar Strength Takes Toll

The South Korean currency's real effective exchange rate (REER) dropped to its lowest level since 2009 in June, according to data from the Bank for International Settlements. The won's REER stood at 82.99, down 1.75 points from the previous month.

This marks a significant decline, with the REER last reaching this level in March 2009 following the global financial crisis. The BIS' REER measures a currency's value against major trading partners after adjusting for inflation, serving as a gauge of international price competitiveness.

The won weakened sharply against the US dollar in June, hitting an intraday low of 1,555 per dollar on June 30, its weakest level in over 17 years. The currency came under pressure from heavy foreign selling of South Korean stocks and strong demand for dollars from domestic investors.