USD-KRW Exchange Rate Increases, Impacting South Korea’s Economy
- Eunyo Hwang
- Apr 16
- 1 min read
April 16 2025
By Eunyo Hwang
Recently, the Korean won has weakened against the U.S. dollar—with the exchange rate increasing up to 1,450 KRW per USD. This change indicates one of the highest levels in recent years and has gained global concerns across financial markets and among the public.
One major reason for the sharp increase is the performance of the U.S. economy, which has led to speculation that the Federal Reserve may maintain high interest rates for longer. This attracts global capital to the U.S. dollar, leading to weakened currencies. Additionally, geopolitical tensions in the Middle East have increased investor demand, later strengthening the dollar as well.
Another contributing factor is Korea’s trade performance. Although exports have recently found possible signs of recovery, the trade balance would remain fragile still. High energy import costs also continue to affect the economy.
The weakening won affects ordinary consumers like us as well, as it increases the cost of imported goods and overseas travel. For international businesses, it means higher costs for materials and challenges in having contracts and importing.
In conclusion, while a weak won can help make Korean products affordable abroad, the impact on inflation and financial stability is a huge concern in Korea. Governments are monitoring the situation and may analyze if another change happens.
