Contested
Bank of Korea governor says won still weak versus past years on effective exchange rate
In short
Bank of Korea Governor Shin Hyun-song (신현송) said on 22 October that the won is weaker than in previous years when measured by effective exchange rates. Newsis reported he spoke to reporters after the bank held its base rate at 3.00%. He cited a BIS effective rate of about 101 on average, against about 89 at the end of August.
Why it matters
The central bank governor's comments on the won's level were carried as breaking news by Yonhap, Newsis and Asia Economy. The documents give no market reaction, so the wider effect is not stated.
Key facts
- Bank of Korea Governor Shin Hyun-song said the won is weaker than in previous years when judged by the effective exchange rate. [ 1 , 3 , 4 , 5 ]
- Newsis reported that Shin spoke to reporters on 22 October after the base rate was held at 3.00%. [ 5 ]
- Shin said the dollar has been strong in recent years, so the effective rate is important to watch. [ 5 ]
- Shin said the BIS effective rate, weighted by trade with partner countries, averages about 101, and was about 89 at the end of August when the rate was around 1,380 won per dollar. [ 5 ]
- Shin said a higher effective rate means a stronger currency, and that the won shows little difference between the nominal and the inflation-adjusted real effective rate. [ 5 ]
- Shin said a 10% stronger won would raise the purchasing power of the lowest-income-quintile households by 0.4% or more. [ 5 ]
- Yonhap's headline also quoted Shin as saying predictability is important. [ 4 ]
Confirmed by several sources
Still unclear
- Whether the Bank of Korea held its base rate at 3.00% on 22 October. Only one document (Newsis) states the rate decision.
- What Shin meant by predictability being important. Only the Yonhap headline carries the phrase, and the available text does not explain it.
- How markets or the exchange rate reacted to the remarks. No document reports a reaction.
What local media are saying
Timeline, local time
- Yonhap flashed Shin's remark that the won is still weaker than in previous years on an effective-rate basis. [ 1 ]
- Newsis reported Shin saying the exchange rate is still considerably weaker than the average of previous years. [ 2 ]
- Asia Economy reported Shin saying the won is still undervalued on an effective-rate basis. [ 3 ]
- Yonhap published a fuller report, with predictability described as important in the headline. [ 4 ]
- Newsis published Shin's remarks made to reporters after the rate hold, with BIS effective rate figures. [ 5 ]