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South Korean won drops to lowest level in 15 years after Fed interest rate cut
(MENAFN) The South Korean won dropped to its lowest level in 15 years on Thursday, trading above 1,450 won per US dollar for the first time since the 2008 financial crisis. This significant decline followed the US Federal Reserve's decision to lower its benchmark interest rate by 0.25 percentage points, bringing the rate to a range of 4.25–4.50 percent. The Fed’s decision marked its third consecutive rate cut, which was announced after a two-day meeting.
The Fed's policy shift has led to a stronger US dollar, further exerting pressure on the South Korean won. The central bank's hawkish stance, signaling only two additional rate cuts next year, intensified the currency’s struggles. The won has already been under strain due to domestic issues, such as political uncertainty and a more dovish stance from the Bank of Korea.
The depreciation of the won is a result of both external and internal factors. On the global front, the US dollar has strengthened due to the Fed’s policies, making it more difficult for the won to retain its value. Domestically, the Bank of Korea’s cautious approach to monetary policy and ongoing political instability have compounded the currency’s challenges.
As the won continues to weaken, experts are closely monitoring the situation to see if South Korea’s central bank will intervene to stabilize the currency. However, with both global and domestic factors at play, the outlook for the won remains uncertain, and the situation could continue to evolve in the coming months.
The Fed's policy shift has led to a stronger US dollar, further exerting pressure on the South Korean won. The central bank's hawkish stance, signaling only two additional rate cuts next year, intensified the currency’s struggles. The won has already been under strain due to domestic issues, such as political uncertainty and a more dovish stance from the Bank of Korea.
The depreciation of the won is a result of both external and internal factors. On the global front, the US dollar has strengthened due to the Fed’s policies, making it more difficult for the won to retain its value. Domestically, the Bank of Korea’s cautious approach to monetary policy and ongoing political instability have compounded the currency’s challenges.
As the won continues to weaken, experts are closely monitoring the situation to see if South Korea’s central bank will intervene to stabilize the currency. However, with both global and domestic factors at play, the outlook for the won remains uncertain, and the situation could continue to evolve in the coming months.
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