Strength of Korean Won
The Korean currency to appreciate due to
gains in productivity at year-end
The foreign exchange rate would see the Korean won gaining strength at the year-end, due to rising productivity of the manufacturing industry, the Daeshin Economic Research Institute predicted recently.
An analyst with the institute said President Bush's China visit will be made in November and the U.S. Treasury Department's report on the foreign exchange is due also in November, which would combine together to force reevaluation of China's yuan currency, which would also strengthen Asian currencies.
Indicating that one of the most important factors for determining currency exchange rates has been productivity, the analyst said IT producers price increased 0.2 percent month-on-month, showing that exports led by the IT sector would be smooth this year, with the possible rise in the productivity of the manufacturing sector. This means that the manufacturing sector would be able to withstand the appreciation of the Korean won currency vis-vis U.S. dollar with the strengthening of its competitive edge in the international market.
He said he found out that the currencies of the U.S. and Japan appreciated when the productivity of the two countries climbed.
The researcher forecast that the productivity will rise with the month of November as the lowest point and the exchange rate of U.S. dollar and won is expected to decline with November as the highest point. He said the rate would hit 1,065 won per dollar before settling down to the level of 1,015-1,035 won by year-end. nw