The price of the earned dollar rises to 1,409 won: The DONG-A ILBO

The won-dollar exchange rate breached the 1,400 won to the dollar threshold for the first time since the 2008 global financial crisis due to the US Federal Reserve’s third “giant leap” of raising its key rate by 0.75% all at once. Worse still, it implied that the last two meetings of the Federal Open Market Committee (FOMC) (November and December) this year will raise the key rate by another 1.25%, leaving the global financial market in anxiety.

On Thursday, the won-dollar exchange rate registered 1,409.7 won, up 15.5 won from the previous trading day, on the Seoul Foreign Exchange Market. The closing exchange rate of 1,400 won was exceeded for the first time in 13.5 years since March 20, 2009, when it closed at 1,412.5 won. It even soared to 1,413.4 won Thursday at noon.

Although the South Korean government and foreign exchange authorities not only made official verbal interventions in the market, but also practically got involved in selling dollars to support the won, the market eventually broke through the psychologically important level. of 1,400 to the dollar. With increasing volatility in the foreign exchange market, the Financial Stress Index (FSI), a yardstick for judging the degree of stress in the global financial system, registered as high as 17.6 last month, approaching the significant level of stress (more than 22).

As the Fed took the 3rd “giant leap” on Wednesday (local time), the US key interest rate fell from 2.25-2.50% annualized to 3.0-3.25% annualized. Compared to South Korea’s policy rate of 2.5% annualized, the highest rate of 3.25% is 0.75% higher. As the Fed signaled another “giant leap”, the global financial market was thrown into a state of shock.

Based on dot chart data on Fed members’ outlook for the U.S. key interest rate, it will hit 4.4% on an annualized basis by the end of this year, rising further to 4.6% at an annualized rate. Federal Reserve Chairman Jerome Powell told a news conference on Wednesday that despite some level of recovery in the supply chain, inflation remains high, adding that the Fed will not consider lowering. the key interest rate until it is certain that inflation is on the decline. way to the two percent target. His message implied a substantial hike in the key rate thereafter.

Shivering with the nightmare of the “leaps and bounds”, the global market worries about an economic slowdown, while a stronger dollar puts enormous pressure on the market. The U.S. dollar index, a measure of the average value of the U.S. dollar against six major foreign currencies, rose to the 111 level to hit a 20-year high. On Thursday, the dollar-yen exchange rate on the Tokyo foreign exchange market rose above 145 yen for the first time in 24 years during intraday trading.

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