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Reduced Impact and Implications of KRW Exchange Rates on Exports

Author

Listed:
  • Lee, Sora

    (Korea Institute for Industrial Economics and Trade)

  • Kang, Sungwoo

    (Korea Institute for Industrial Economics and Trade)

Abstract

The value of the Korean won (KRW) to the US dollar (USD) recently fell to its weakest level since 2009, and its real effective exchange rate (REER) was even lower. The KRW to USD rate exceeded 1,400 won per dollar due to the tight monetary policy of major economies, the Russian invasion of Ukraine, and fears of a recession. Companies highly vulnerable to FX risks should receive policy support and monitoring to prepare for price fluctuations. Long-term tasks include pursuing differentiation with comparative advantage based on key technologies, securing a leading position in supply chains, and upgrading Korea’s economic structure by increasing the contributions of domestic consumption to economic growth.

Suggested Citation

  • Lee, Sora & Kang, Sungwoo, 2022. "Reduced Impact and Implications of KRW Exchange Rates on Exports," i-KIET Issues and Analysis 22/2, Korea Institute for Industrial Economics and Trade.
    • Handle: RePEc:ris:kietia:2022_002
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    More about this item

    Keywords

    monetary policy; money supply; exchange rates; USD-KRW; Korea; tight money; FX; foreign exchange; foreign exchange rates; competitiveness; exports; export competitiveness;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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