Won Plummets to Lowest Level Since 2009 Amid Strong Dollar

The Korean won's real effective exchange rate (REER) hit its lowest level in over 17 years in June, falling to 82.99 as the US dollar remained strong.

According to data from the Bank for International Settlements (BIS), the REER measures a currency's value against major trading partners after adjusting for inflation, serving as a gauge of international price competitiveness.

The won's decline came as it weakened sharply against the US dollar, hitting 1,555 won per dollar in intraday trading on June 30, its weakest level since March 2009. The currency also averaged 1,527.95 against the US dollar in June, its weakest monthly average since February 1998.

The sharp decline in the won's value was triggered by heavy foreign selling of South Korean stocks and strong dollar demand from domestic investors, leading to a nearly 6% plunge in the Korea Composite Stock Price Index (KOSPI) on Friday.