South Korea’s currency is trading around multi-decade lows against the dollar despite surging semiconductor exports and a booming stock market, puzzling investors and traders who had bet on the won appreciating.
The won has fallen 4 per cent against the dollar this year, placing it among Asia’s worst-performing currencies, ahead of only the Philippine peso, Indian rupee and Indonesian rupiah — countries that are exposed to the Iran war energy shock.
But unlike those countries, South Korea is experiencing a record trade surplus on the back of demand for memory chips from US AI companies. In the first quarter, the country ran a current account surplus of $73.8bn, while net profit at chipmakers Samsung Electronics and SK Hynix hit $28.3bn and $22.4bn, respectively.