‘고공행진 뒤 하락’ 환율에 커지는 원화 변동성…세계 최고 수준

Over the course of July, South Korea's won experienced a notable decline in the exchange rate against the US dollar, marking the highest level of volatility among major currencies. According to data released by the Bank of Korea on July 13, the daily fluctuation rate for the won-to-dollar exchange rate reached 0.53%, with a range of 8.0 won, surpassing the previous fluctuations in May (0.45%, 6.6 won) and June (0.50%, 7.6 won).

The exchange rate itself climbed from 1507.9 won at the end of May to 1549.4 won at the end of June, before dropping sharply to 1424.0 won by the end of July. When compared internationally, the won's fluctuation rate was the highest among major currencies, except for Russia. The daily fluctuation rates for the US dollar, euro, Australian dollar, British pound, Japanese yen, New Zealand dollar, and Norwegian krone stood at 0.21%, 0.22%, 0.29%, 0.30%, 0.37%, 0.38%, and 0.44% respectively.

Among emerging economies, only China and Indonesia showed lower rates, with 0.10% and 0.23% respectively, while India and Brazil had rates of 0.24% and 0.45% respectively, while Russia's rate was 0.55%. This high level of volatility can be attributed to South Korea's heavy reliance on trade and the openness of its capital markets, making it particularly susceptible to external financial conditions.

Foreign investment in domestic stocks amounted to $216.5 billion in July, with $207 billion in equity and $9.6 billion in bonds. The net outflow of $216.5 billion in equities, compared to $307.2 billion outflow in June (with $323.7 billion from equities and $16.5 billion in bonds), indicates a reduction in outflows. The outflow pattern from equities has persisted since January of this year, while the inflow from bonds was reversed in July after beginning in April as part of the inclusion of South Korean government bonds in the World Government Bond Index (WGBI).

The Bank of Korea attributed the shift to equities outflows to tensions in the Middle East and growing concerns over global artificial intelligence (AI) investments, while the decrease in bond inflows was attributed to lower interest rates on South Korean government bonds due to the decline in US bond yields. The Bank of Korea assessed that South Korea's foreign exchange inflow conditions remain favorable, with the one-year and medium-term foreign exchange borrowing rates for the eight major banks falling from 25bp to 17bp and 37bp to 41bp respectively. The Credit Default Swaps (CDS) premium remained stable at 23bp for both July.