Ⓒ JoongAng Ilbo / JoongAng Ilbo Japanese version2022.07.06 17:39
The fear of “R (recession, economic stagnation)” struck the foreign exchange market. The won market temporarily entered the 1310 won level per dollar. It is the lowest won level in 13 years.
In the Seoul foreign exchange market on the 6th, the won market started trading at 1308.50 won, which is 8.20 won lower than the previous day’s 1 dollar = 1300.30 won. With the start of trading, the won began to drop rapidly, surpassing the 1310 won level. It even recorded 1311 won during trading hours. It is the first time since July 2009, when the effects of the global financial crisis continued, that the won recorded the 1310 won level per dollar during trading hours. On this day, the won exchange rate finally closed at 1306.30 won, which is 6 won lower than the previous business day.
The foreign exchange market is shaking with the outlook that the economic stagnation is approaching following inflation. Kim Jina, a researcher at Yujin Investment Securities, said, “Inflation is causing an economic stagnation. Inflation has caused a stagnation in consumer sentiment, a decline in purchasing power, and a harsh corporate environment. It has been confirmed. “
The US gross domestic product (GDP) for the January-March quarter of this year fell 1.6% annually from the previous quarter. The signs of a slowdown are clear, but the Federal Reserve Board (FRB), the central bank of the United States, has shown no signs of slowing interest rate hikes. Fed Chair Powell stabbed the nail last month, saying, “It’s even worse for the economy to settle high prices than to stagnate by raising interest rates.”
Unlike other developed countries like Europe and Japan, the US dollar has remained high as it has declared that it will continue to step on the accelerator to raise interest rates. Concerns regarding the economic downturn have spread and the value of the dollar as a safe haven has risen further.
The Korean financial market is also in the middle of the storm. The value of the won has plummeted as much as it did at the time of the financial crisis. The Korean economy, which is highly dependent on exports, has no choice but to react more sensitively to concerns regarding the global economic stagnation.
Kim Sang-man, a researcher at Hana Financial Investment, said, “Inflation and interest rates do not seem to be in a good environment for emerging countries due to economic slowdown factors. Korea’s trade balance has been for the first time in three consecutive months since the financial crisis. It is recording a deficit. Where Korea Co., Ltd. is recording an operating deficit, the difficulties of individual companies will be weighted and appear. “
The domestic stock market is also scared of recession. This morning, the Korea Composite Stock Index (KOSPI) started trading at 2330.11, down 11.67 points (0.5%) from the previous day. After that, during trading hours, it temporarily dropped to the 2310 point level.
Concerns over the economic downturn have also chilled international oil prices, which had been rising. It fell by more than 8% in one day and fell below the $ 100 level per barrel. West Texas Intermediate (WTI) August delivery price fell 8.2% from the previous day to $ 99.5 a barrel on the New York Mercantile Exchange (NYMEX) on the 5th.
