South Korean Experts Identify Low 1300 Won as Ideal Exchange Rate

The ideal exchange rate for the South Korean won sits in the low 1300 range against the US dollar, according to a new expert survey. This figure represents the balance point where import costs remain manageable while export competitiveness is preserved. The current market rate stands at 1383.3 won per dollar, closing on the 18th. This level is close to the 1400 threshold that many market participants monitor closely.

The Seoul Economic Daily conducted the survey on the 20th following recent monetary tightening in the United States and Japan. Seven of the twenty respondents selected the 1300 to 1350 won bracket as appropriate. Four experts chose the 1350 to 1400 won range. This combination means that 11 of the 20 participants, or 55%, believe the rate should reside in the 1300 series. The remaining experts suggested either higher or lower levels.

Majority Favors Stronger Won Impact

Most specialists view a stronger won as a net positive for the domestic economy. Fourteen of the twenty respondents, representing 70%, stated that appreciation benefits the broader economic landscape. Only one expert described the impact as negative. The remaining five respondents called the effect neutral. This consensus suggests that the benefits of lower import prices outweigh the risks to corporate earnings.

A stronger currency lowers the cost of imported goods and fuels. It also increases the real purchasing power of households. This is particularly relevant given high global oil prices. However, experts warn that a rapid appreciation could strain exporters. Companies may face higher hedging costs and reduced price competitiveness in foreign markets.

Policy Makers Expected to Hold Rates

Expectations for the Bank of Korea’s October monetary policy decision favor a pause. Fifteen of the twenty respondents, or 75%, projected that the base rate would remain unchanged. Four experts forecast a rate increase. No respondents predicted a rate cut in this specific survey. This expectation aligns with a cautious approach to managing inflation and growth.

The survey highlights a strategic tension in current policy. The central bank must balance the need for stable prices against the need for sustainable growth. A stable exchange rate in the low 1300s is seen as a key component of this balance. It provides a buffer against external shocks while supporting internal economic health. Market participants are watching these dynamics closely as rates fluctuate.

Expert Views on Currency Stability

Kang Hyun-joo, a senior research fellow at the Korea Capital Market Institute, emphasized the benefits of a stronger won. He noted that it eases upward pressure on import prices. This directly supports household budgets during periods of high energy costs. The survey results from GN auto markets/forex sources confirm this view among the broader expert community. The data points to a clear preference for a stable, moderately strong currency.