본문내용 바로가기
주메뉴 바로가기
하단푸터 바로가기
통합검색
검색

발간물

KIEP Opinions

World Economy Update 상세
제목 What determines the exchange rate of the Korean won?
저자 DeokRyong Yoon
발간일 2019-11-08
첨부파일 KIEP opinions_no173.pdf 

The determination of exchange rates in international financial markets is, of course, based on the supply and demand between foreign exchange and the local currency. The supply of foreign exchange is determined by the current and capital account balances. In the world before the 1990s, when the capital market was not liberalized, the current account determined the supply of foreign exchange. As the share of income transfer between countries remained relatively low, the current account balance was actually determined by the trade balance.

The Korean foreign exchange market is traded on a dollar basis, so the supply and demand of the dollar determines the Korean won’s exchange rate. In South Korea’s foreign exchange market, it is U.S. monetary policy that most directly affects the supply and demand of the dollar. U.S. monetary policy is more influential than Korea’s in determining the won’s exchange rate. This phenomenon is hardly limited to the Korean currency market.

The index that works most closely with the Korean won’s exchange rate is the U.S. dollar index. The dollar index is an indicator of the international value of the U.S. dollar. The most important factor that determines the dollar index is U.S. monetary policy. Therefore, in order to predict any changes in the Korean won’s exchange rate, one must first look at the variables affecting the dollar index. Those looking to understand changes in Korea’s exchange rate should pay particular attention to changes in U.S. monetary policy.

EMERiCs CSF EAER KEI한미경제연구소 통합무역정보서비스 국가정책연구포털 대한민국정부 청탁금지법 통합검색 청렴신문고 개인정보보호위원회

e-mail 인증

본인인증을 위해 E-mail인증절차를 진행하고 있습니다.
발송된 메일로 인증확인 후 해당 서비스를 이용하실 수 있습니다.
* 입력한 E-mail은 저장되지 않습니다.

E - mail 입력

E - mail 입력

@