Summary
- Kwang-Hyuk Choi, Head of the LS Securities Research Center, forecasted that the KRW/USD exchange rate could fall to around 1,330 KRW by the end of this year.
- He stated that as the US base interest rate shifts toward a downward trend, a weaker dollar and a lower exchange rate are expected.
- However, he noted that if the US IT bubble materializes, it could negatively impact exports and the exchange rate.
Kwang-Hyuk Choi, Head of the LS Securities Research Center, Outlook
The Korean won, which had shown strength on expectations of domestic demand stimulus following the inauguration of the new government, has turned weak once again. There are now forecasts that the KRW/USD exchange rate could fall to the 1,330 KRW range by the end of this year.
Kwang-Hyuk Choi, Head of the LS Securities Research Center, stated in a lecture on "Dollar Outlook for the Second Half and the Possibility of a Weak Dollar" held at the Korea Exchange on the 26th, "Previously, trade balance trends were directly reflected in the exchange rate, but since 2023, outflows of won have intensified due to increased overseas investments by individual investors such as 'Seohak Ants' and corporations. Now, domestic demand recovery has become the key variable in forecasting exchange rates, rather than the trade balance."
Choi presented a year-end forecast for the KRW/USD exchange rate at the level of 1,330 KRW. He said, "With the US base interest rate entering a downward trend, the dollar is expected to weaken," and predicted, "The KRW/USD exchange rate will also gradually decline." However, he warned, "If the US IT bubble materializes, it could have a negative impact on exports and the exchange rate."
Go Jeong-sam, Hankyung.com reporter jsk@hankyung.com
Korea Economic Daily
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