(LEAD) Won dips below 1,380 level per dollar for 1st time in more than 13 years

All News 11:39 September 07, 2022

(ATTN: UPDATES with market reaction, background throughout)

SEOUL, Sept. 7 (Yonhap) -- The South Korean currency on Wednesday declined below the 1,380-won level against the U.S. dollar for the first time in more than 13 years during intraday trading amid a sharp decline in the country's current account surplus.

The local currency had been trading at 1,387.30 won per dollar as of 11:25 a.m., down 15.60 won from the previous session's close.

In the morning session, the won slid to as low as 1,388.40 against the greenback at one point.

It marked the first time that the Korean currency plunged below 1,380 against the dollar during intraday trading since April 1, 2009.

The won's weakness came as the U.S. dollar remained firm against major currencies amid the Federal Reserve's aggressive monetary tightening and concerns about a global economic recession.

South Korea's narrowed current account surplus and its widening trade deficit also exerted downward pressure on the won.

South Korea posted a current account surplus for the third straight month in July, but the surplus sharply fell as the goods balance logged a deficit for the first time in about 10 years, central bank data showed.

The current account surplus came to US$1.09 billion in July, compared with a surplus of $5.61 billion posted in June. The Bank of Korea said the current account could swing to a deficit in August due to a record trade deficit.

The country logged a record trade deficit of $9.47 billion last month due to high energy costs. It posted a trade deficit for five months in a row for the first time in about 14 years.

Experts said the Korean currency could further weaken to the 1,400 level against the dollar due to strong demand for the dollar. The won has slid more than 14 percent against the dollar so far this year.

Foreigners' stock sales also put downward pressure on the local currency. Seoul's main stock index had fallen 38.09 points, or 1.54 percent, to 2,371.93 as of 11:25 a.m.