South Korea's currency appreciated against the U.S. dollar in the second quarter despite the U.S. Federal Reserve's interest rate hike that was offset by boom in the South Korean stock market and the U.S. political uncertainty, central bank data showed Wednesday.
The won/dollar exchange rate averaged 1,130.1 won per dollar in the April-June quarter, down 2.0 percent, or 22.5 won, from the previous quarter, according to the Bank of Korea (BOK).
The lower exchange rate indicated the South Korean currency's appreciation versus the greenback. The U.S. dollar weakened to the local currency on the back of booming local stocks that showed a record-breaking trend as well as political uncertainty in the United States.
The stronger South Korean currency tended to have a negative effect on the price competitiveness of local exporters. The won's appreciation to the dollar was forecast to be reversed as the BOK kept its record-low policy rate for over a year despite the Fed's rate hike to a range of 1.00-1.25 percent in mid-June.
The BOK lowered its benchmark rate to an all-time low of 1.25 percent in June last year from 3.25 percent in July 2012.
The won/dollar exchange rate averaged 1,144.1 won a dollar in June, up 2.2 percent, or 25.7 won, from three months ago. Daily volatility for the won/dollar exchange rate averaged 4.2 won, or 0.37 percent, in the second quarter, marking the lowest since the third quarter of 2014.
Foreign currency transactions posted a daily average of 23.07 billion U.S. dollars in the April-June quarter, up 0.66 billion dollars from the previous quarter.
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