Photo : YONHAP News
The real value of the Korean won fell to its lowest level since the 2008 global financial crisis last month, weighed down in part by the impact of the Middle East conflict.
According to data from the Bank of Korea and the Bank for International Settlements (BIS), the won’s real effective exchange rate (REER) index stood at 85-point-44 at the end of March, down one-point-57 points from a month earlier.
This marks the lowest level in 17 years, since March 2009, when the index was 79-point-31.
The REER previously dropped to 68-point-one during the 1997 Asian financial crisis and 78-point-seven during the 2008 global financial crisis.
The REER measures a currency’s purchasing power by adjusting for inflation and trade weights, with a reading below 100 indicating undervaluation relative to the 2020 base year.
Among the 64 economies tracked by the BIS, the won ranked as the third weakest, behind the Japanese yen and the Norwegian krone, meaning it buys fewer goods and services abroad than most major currencies.