The Korean won breached the 1,500-per-dollar level during regular trading hours for the first time in 17 years, raising concerns that this elevated exchange rate could become the new normal.
The won hit 1,501.0 per dollar shortly after the opening of the Seoul foreign exchange market on the 16th, marking the first time the currency crossed the 1,500 threshold during regular trading since the global financial crisis in March 2009. While the won touched 1,500 in after-hours extended trading earlier this month, market participants note that the psychological impact differs significantly between thinly-traded overnight sessions and regular daytime trading.
Foreign exchange market participants share a common view that there is no clear benchmark to gauge the currency's upper limit at this point.
As the forces driving exchange rates shift from domestic supply and demand to external variables, currency dealers are increasingly looking to the government and monetary authorities for direction. The assessment is that market forces alone cannot reverse the trend amid a confluence of dollar strength, surging oil prices, and major geopolitical risks stemming from the Iran situation.
"This situation is not just about the won-dollar rate, so it won't be easy for our authorities to act aggressively on their own," said a foreign exchange dealer at a major commercial bank.
Dealers are hoping for a decisive move—such as joint Korea-Japan action or U.S.-Japan coordination—rather than simple dollar-selling intervention by domestic authorities. Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol hinted at the possibility of coordinated action between Korea and Japan after a bilateral finance ministers' meeting on the 14th. "The dollar is strong while the euro, yen, and won are depreciating," he said. "Stabilizing the Middle East situation is important, but we can engage in verbal intervention if necessary."
Markets are increasingly worried that the 1,500 level could become the new normal. The won-dollar exchange rate has closed above 1,400 for a total of 196 trading days since 2025, and has not dipped below 1,400 for even a single day this year. With 1,400 already established as the new normal, anxiety is spreading across markets that 1,500 could follow a similar path. This is why calls for strong policy responses, including international coordination, are growing louder.
Market perceptions of the currency's ceiling are also shifting rapidly. At the start of the year, many viewed forecasts of a break above 1,500 as excessive, but now that the 1,500 level has been breached during regular trading, some are even discussing the possibility of the mid-1,600 range.
However, few believe the resistance level will immediately surge much higher. "Export companies still have dollar holdings to sell, so we should keep the possibility of a decline open," said Lee Young-hwa, economist at Busan Bank.
