Won’s competitiveness gauge hits 17-year low

The Korean won's real effective exchange rate fell to its lowest level in more than 17 years in June as the U.S. dollar remained broadly strong, data showed Sunday.

According to the Bank for International Settlements (BIS), the won's real effective exchange rate (REER) stood at 82.99 in June, down 1.75 points from the previous month.

The June reading was the lowest since March 2009, when the REER stood at 79.31 in the aftermath of the global financial crisis.

The BIS' REER measures a currency's value against those of major trading partners after adjusting for inflation, serving as a gauge of international price competitiveness.

The decline in the REER came as the won weakened sharply against the U.S. dollar, hitting 1,555 won per dollar in intraday trading on June 30, its weakest level in more than 17 years.

The currency came under pressure from heavy foreign selling of Korean stocks and strong dollar demand from domestic investors.

The won averaged 1,527.95 against the dollar in June, its weakest monthly average since February 1998 during the Asian financial crisis.

Yonhap