June’s average won-dollar exchange rate exceeded 1,520 won, reaching a level 70 won above the 2008-2009 financial crisis peak. Persistent uncertainty from the U.S.-Iran conflict and ongoing foreign investor outflows are driving concerns that the rate could stabilize in the 1,500-won range.
Data from the Bank of Korea shows the average closing rate in June was 1,521.4 won—the highest in nearly three decades, surpassing the 2008 crisis level (1,453.3 won) by 68.1 won. The rate first breached 1,500 won on May 15 and has remained there for 23 consecutive trading days, the longest such streak since the 1997-1998 financial crisis.
Elevated rates stem from both global and domestic factors. The unresolved U.S.-Iran war has maintained market instability, despite recent ceasefire agreements. Suh Jung-hoon of Hana Bank notes that expectations for a rapid decline to 1,450 won have not materialized, emphasizing prolonged uncertainty.
The Federal Reserve’s hawkish stance is another key driver. Rising U.S. interest rates incentivize capital to flow back to the dollar, strengthening its value and weakening the won. On June 18, following the Fed’s rate hike signals, the won-dollar rate jumped 13.7 won. Concurrently, the dollar index reached a 13-month high of 101.123 on June 19.
Domestically, foreign capital is exiting South Korean stocks, further pressuring the won. Despite attractive semiconductor investments, foreign institutions have sold $120.2 billion worth of local stocks this year through June 19, yet their ownership ratio rose to 41.03% as stock prices surged rapidly.
Additionally, major exporters with record profits have not significantly increased won liquidity into the market, exacerbating the rate’s strength.