The dollar fell below the psychologically important W970 level on Wednesday due to a heavy inflow of foreign stock funds. In the foreign currency market, it ended down W6.90 from the previous session at W968.90, the lowest level in eight years and two months, revisiting pre-IMF crisis levels.
Ryu Hyeon-jeong, a foreign currency manager with Citi Bank, said foreign stock buying caused chaos in the market. “Despite the plummeting dollar, I didn’t feel that the government was making any particular efforts to defend it,” she added. Experts predict the dollar will depreciate further because of an oversupply here and the yen also gaining against the greenback.
“The dollar will fall to W950 or thereabouts faster than expected because foreigners are selling their dollar reserves to move into the falling stock market and there is a feeling that the dollar will lose more,” says Cho Hee-bong, a fund manager with Hana Bank.
Samsung Economic Research Institute in a report said the average won-dollar exchange rate would be no more than W960 this year.