South Korean Won’s Real Value Falls to 85.06, Lowest Since 2009 as Kospi Tops 8,000
Updated
Updated · TradingView · May 29
South Korean Won’s Real Value Falls to 85.06, Lowest Since 2009 as Kospi Tops 8,000
5 articles · Updated · TradingView · May 29
BIS data showed the won’s real effective exchange rate fell to 85.06 in April, its weakest level since March 2009, even as South Korea’s AI-driven stock rally pushed the Kospi above 8,000.
Middle East war risk and oil above $100 a barrel deepened pressure on the import-dependent currency, which has stayed above 1,500 per dollar and is about 4% weaker than at the start of 2026.
Capital flows are also undermining the won: foreign investors sold a net 110 trillion won of Korean equities in the first half, while markets worry a planned $350 billion U.S. investment commitment will require more dollar buying.
The weakness increasingly looks structural, with a record $85 billion first-quarter current-account surplus offset by $65.42 billion in net financial-account outflows as pension funds, retail investors and exporters keep more money in dollars.
Economists say weak foreign demand for Korean bonds and South Korea’s slower long-term growth relative to the United States mean stabilizing the won will require broader structural reforms, not just market intervention.
With an AI-fueled stock boom, why is South Korea's currency facing a crisis-level collapse?
Can Seoul's reforms stop the won's freefall without derailing its AI-powered economic engine?
As its tech giants boom, are South Koreans losing faith in their own economy?
South Korea’s KOSPI Hits Record Highs Amid Won Weakness: Semiconductor Surge Masks Currency and Structural Risks
Overview
South Korea is experiencing a unique situation where its stock market is soaring, mainly driven by semiconductor giants, while its currency, the Won, continues to weaken. This currency decline is fueled by a net outflow of U.S. dollars, as South Korean companies invest more overseas and exporters hesitate to convert their dollar earnings back into Won, expecting further weakness. At the same time, foreign investors are pulling large amounts of capital out of the stock market, intensifying the pressure on the currency. This combination highlights a disconnect between strong stock performance and underlying economic challenges.