美联储周三一如预期降息，但主席鲍威尔表示，进一步降低借贷成本现在取决于进一步降低持续高通胀的进展。The won fell to its lowest level in 15 years on Thursday due to the Federal Reserve's cautious stance on further interest rate cuts and domestic political uncertainty.
The Zhitong Finance App notes that the won fell to its lowest level in 15 years on Thursday due to the Federal Reserve's cautious attitude about further interest rate cuts and political uncertainty in South Korea.
As of press release, the onshore market of the won against the US dollar was reported at 1448.9, and the opening price was 1453.0, down 0.96% from the previous trading day, the lowest level since March 16, 2009.
The Federal Reserve cut interest rates as expected on Wednesday, but Chairman Powell said that further reducing borrowing costs now depends on progress in further reducing continued high inflation.
Powell currently predicts that next year they will cut interest rates by 25 basis points only twice, half a percentage point lower than the September forecast, and the inflation forecast for the first year of the new Trump administration is high.
The tough stance boosted the dollar and increased downward pressure on the Korean won. Earlier this month, South Korean President Yoon Suk-yue imposed martial law for a short time due to impeachment, leading to domestic political turmoil, and the South Korean won was already under pressure.
Considering the negative impact of the December 3 martial law on the economy, the Bank of Korea said on Wednesday that economic growth forecasts for this year and next are at downside risk.
Since December, the won has depreciated 3.9% against the US dollar, falling for the third month in a row.
The won has fallen 11% so far this year, making it the worst performing Asian emerging market currency this year, and is expected to be the worst year since 2008.
Before the market opened on Thursday, South Korea's finance minister said that if the volatility is too high, the government and central bank will quickly and boldly take steps to stabilize the financial market.
A local currency trader said, “It is suspected that the authorities are defending the 1450 figure, which makes it difficult for the won to short near this level.”
To help ease monetary pressure, the country's Financial Services Commission requires local banks to manage foreign exchange transactions and loans flexibly.
The Bank of Korea has expanded the amount of foreign exchange swaps with the National Pension Service, a market-stabilizing tool to absorb the demand for dollars generated by the world's third-largest pension fund from growing overseas investments.
On the stock market side, the benchmark KOSPI index fell 2.5% at one point as foreign investors sold off local stocks.
