The won-dollar exchange rate fell sharply in overnight transactions on the 14th, briefly dipping below 1400 won.
On this day in the Seoul foreign exchange market, the won exchange rate against the U.S. dollar was recorded at 1400.0 won, a decrease of 16.0 won from the previous day's closing transaction price as of 5:20 p.m.
After finishing the weekly transaction at 1420.2 won at 3:30 p.m., the exchange rate, which had been fluctuating for a while, turned to a downward trend around 4:52 p.m. and plummeted to 1396.5 won by 5:06 p.m.
The dollar index, which shows the value of the dollar against six major currencies, also fell significantly during the same time frame. It dropped from 100.869 at 3:30 p.m. to 100.422 at 5:08 p.m., and is currently at around 100.520.
A source from a major commercial bank noted, "It seems that the selling pressure for the dollar has increased as news emerged that South Korean and U.S. officials held face-to-face discussions regarding the operation of the foreign exchange market."
Some market participants interpret this as a reflection of the potential demand from the U.S. side for won appreciation. During overnight transaction hours, there tends to be a greater price fluctuation due to lower liquidity.
The Reuters news agency reported, citing comments from South Korean government officials, that Deputy Minister Choi Ji-young from the Ministry of Economy and Finance and U.S. Deputy Secretary Robert Kaproth met in Milan, Italy, on the 5th to share mutual understanding on the principles of foreign exchange market operations and agreed to continue discussions in the future.
Some in the market speculate that this discussion indicates that the U.S.-Korea exchange rate negotiations have reached an agreement stage, but realistically, the prevailing assessment is that it is still premature.
An official from the foreign exchange authorities stated, "Since the U.S.-Korea '2+2 Trade Consultation' held in Washington, D.C., in April, there have been ongoing informal consultations, and this meeting in Milan was a face-to-face contact made during the annual meeting of the Asian Development Bank (ADB)," drawing a line on the speculation of an agreement.
Deputy Minister Choi Ji-young attended this meeting as the chief representative for the finance ministers and central bank governors meeting of South Korea, Japan, and China, as well as the ASEAN+3 (South Korea, Japan, and China) and the 58th annual meeting of the ADB.