Won at 1,370 Won Level Sparks Asset Price Revaluation Debate
The won/dollar exchange rate has fallen to the 1,370 won level, intensifying the debate over asset price revaluation. Opinions are divided on whether the recovery of the won's value signals a normalization of asset prices or if it is merely a temporary change. According to the Bank for International Settlements (BIS), South Korea's real effective exchange rate in June was 82.99, down 1.75 points from the previous month, marking the lowest level since March 2009. The average won/dollar exchange rate for the same month was 1,527.95 won, the highest since February 1998. In August, the won/dollar exchange rate fell to 1,376.50 won on the 24th, the lowest since September 17 of last year. The market analyzes that the dollar selling by export companies and shareholder returns from major semiconductor firms are factors contributing to the strengthening of the won. SK Hynix announced a 40 trillion won share buyback, increasing demand for the won. However, it remains uncertain whether the won's strength will lead to a structural shift. Exchange rate fluctuations have complex effects on asset prices, making it important to distinguish whether nominal price increases reflect actual value increases. In the real estate market, Seoul's housing prices have risen for 13 consecutive months as of June, and the government's adjustment of high-value property taxes is interpreted as an attempt to cool down the overheating market. Currently, the decline in the exchange rate, semiconductor supply and demand, and housing demand in Seoul are moving simultaneously, and whether the won's strength will lead to asset price revaluation may depend on future exchange rate trends and policy responses.
-- Price
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