‘슈퍼 달러’의 역설: 한국 경제, 펀더멘털의 견고함과 환율의 비명 사이에서 > K-wave Trends

The most direct and powerful catalyst for this surge in exchange rates is the large-scale withdrawal of funds by foreign investors. This year, foreigners have been net selling nearly 120 trillion won worth of stocks in the domestic stock market alone, weighing down the value of the won. This sell-off is not simply a sign of distrust in our economy, but is more in the nature of a rebalancing process to balance the global portfolio. As the KOSPI rose steeply and asset values ​​ballooned, pressure to sell the won was maximized as investors realized profits and exchanged their money for dollars. As a result, an ironic situation was created as the demand for dollars needed to sell stocks outweighed the dollars earned from selling semiconductors, overwhelming the market, increasing upward pressure on the exchange rate.

External geopolitical risks and fears of tightening from the United States are also key factors fueling the high exchange rate. As tensions in the Middle East increase, preference for the dollar, a safe asset, has increased globally, leading to the weakening of emerging market currencies, including the won. In addition, as the US employment indicators showed stronger than expected, the possibility of additional interest rate hikes by the Federal Reserve (Fed) raised its head again. The rise in the dollar index naturally led to a rise in the won-dollar exchange rate and became a catalyst for increasing volatility in the domestic foreign exchange market. In particular, the decline in the won is so steep that it is comparable to the Russian ruble among currencies of major countries, further stimulating fear in the market.

The government and foreign exchange authorities did not view this surge in exchange rates as simply a result of market autonomy, but judged it to be a 'concentration phenomenon' involving speculative trading and began to respond. Relevant ministers, including Deputy Prime Minister for Economic Affairs Koo Yun-cheol, sent a strong warning message through an emergency review meeting that excessive volatility will not be tolerated. In particular, the foreign exchange authorities believe that speculative betting through the offshore NDF market is causing market disruption, and are pursuing measures to strengthen the transparency of transactions and absorb them into the domestic market. In addition, we are seeking to restore order in the foreign exchange market by predicting a strict investigation into the so-called ‘Lead & Lag’ behavior, in which export and import companies intentionally delay dollar exchange in anticipation of a rise in the exchange rate.

What is noteworthy is that positive indicators such as strong exports and current account surplus are not working properly to defend the exchange rate. Normally, when exports are good, the supply of dollars increases and the exchange rate should stabilize, but now even exporting companies are adopting a strategy of holding dollars instead of immediately converting them into won to benefit from a high exchange rate. Experts analyze that these companies’ ‘grasping of dollars’ is deepening the lack of liquidity in the market and, as a result, creating a vicious cycle that increases the rate of exchange rate appreciation. Although the fundamentals are strong, psychological factors and the market imbalance between supply and demand are eroding the fundamentals of the economy.

There is great concern that the prolonged high exchange rate will leave deep scars on the real economy as a whole, beyond simply a problem in the financial market. When the exchange rate rises, import prices soar, which directly leads to a decrease in households' spending power and an increased cost burden on domestic companies. In particular, the pressure on import prices coupled with the rise in international oil prices is making the Bank of Korea's position in managing monetary policy even more difficult. Raising interest rates to control inflation raises concerns about a recession in domestic demand, while intervening to control the exchange rate poses a dilemma in that it cannot be free from controversy over its effectiveness. Although government intervention may contribute to controlling the pace of the exchange rate to some extent, the prevailing cold assessment is that it has limitations in reversing the fundamental trend.