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On the 4th, the won-dollar exchange rate plummeted 14 won to 90 points (the value of the won skyrocketed) and quickly fell to 1082 won per dollar at 10 points, so foreign exchange authorities and market experts did not They hide. The exchange rate closed at 1,097 won, which fell 3,80 won the day before, and fell to 1,090 won in two years and six months based on the closing price, because it sank back to the level of 1080 won in one day. In line with this trend, the analysis suggests that the situation where the exchange rate falls below the 1000 won line can be realized.
Experts cited △ the US economic stimulus plan, △ the anticipation of the spread of the Corona 19 vaccine and △ the improvement of Korea’s economic fundamentals (basic physical strength) as the background to the rapid fall in the rate.
The Speaker of the House of Representatives of the United States, Nancy Pelosi (Democratic Party), and the Republican Representative of the Senate, Mitch McConnell, exchanged views on the stimulus by phone. The Democratic Party of the United States is offering a stimulus package of $ 90.8 billion.
However, if fiscal spending rises sharply, America’s fiscal deficit will inevitably increase. This is acting as a factor that devalues the dollar around the world. Goldman Sachs and ING of Global Investment Bank (IB) forecast that the value of the dollar will decline by 6% and 10%, respectively, over the next year.
The preference for risky assets, including the Korean won, is increasing in anticipation of the vaccine supply. The American pharmaceutical company Moderna plans to supply 100 to 125 million doses of Corona 19 vaccine to the world in the first quarter of next year. Countries are preparing to approve the use of the vaccine, including the United Kingdom which approves the use of the COVID-19 vaccine jointly developed by the US pharmaceutical company Pfizer and the German Bioentech on the 1st.
Improving fundamentals in the Korean economy, such as improving exports and rising current account surpluses, are also boosting the won’s value. The current account surplus in October this year was $ 11.6 billion (about 12.8 trillion won), the third-largest in history. Considering the improvement in exports, it is clear that this year’s current account will meet the BOK forecast ($ 65 billion).
Seungji Jeon, a researcher at Samsung Futures, analyzed that “the lowest exchange rate is expected to be 1,040 won in consideration of the increase in world trade next year.”
Some observers say that after the global financial crisis, it may reach the lowest exchange rate of 1008 won 50 (July 3, 2014). Considering the recent outlook for dollar weakness from global investment banks like Goldman Sachs, there is also the possibility that even the 1,000 won mark will collapse in the medium and long term. The last time the exchange rate fell below the 1,000 won line was on April 28, 2008 (996 won 60) before the financial crisis.
Reporter Kim Ik-hwan [email protected]
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