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The South Korean Won is the currency of the Republic of Korea – more commonly known as South Korea. The won is a decimalized currency, divided into 100 jeon. The jeon is no longer used for ordinary, everyday transactions. For practical purposes, the lowest denomination of South Korean currency in use is 1 won.
The symbol for the South Korean won is ₩. Thus, an amount of 5000 won is expressed as ₩5000. The foreign exchange market designation for the won is KRW (an acronym for Korean Republic Won). As of late 2020, the USD/KRW exchange rate is 1107.12 – approximately 1100 KRW = 1 USD. Although high, the exchange rate has been remarkably stable for the past decade, primarily fluctuating between 1100 and 1200.
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The Republic of Korea’s central bank is the Bank of Korea. It authorizes and oversees the minting and printing of South Korean currency by the Korea Minting and Security Printing Corporation, a government entity that also does the printing of important government documents.
Both North Korea and South Korea refer to their currency as the won, and both use the same symbol – ₩, so it is important to clearly indicate which won you are talking about when discussing the currency. The foreign exchange designations are different – the North Korean won is designated as KPW.
The won’s existed as currency in Korea in some form for centuries, although other currencies, such as the Mun and the Yang, also served as the country’s legal tender at various times. The modern version of the won dates back to 1902, when it was simply the Korean won since, at that time, the divisions of North Korea and South Korea did not exist.
South Korea Won Us Dollar Currency Stock Photo 1462610711
From 1910 to 1945, Korea was under Japan’s control, and the won was replaced with the Korean yen, tied to the Japanese yen. At the end of the Second World War, following Japan’s surrender, the United States and the Soviet Union occupied the southern and northern parts of Korea, respectively. The entities of North Korea and South Korea were created in 1948, and a new South Korean won currency was issued in 1949.
The South Korean won was initially pegged to the US dollar at an exchange rate of 15 KRW = 1 USD. Unfortunately, the Korean War, which began in 1950, led to a succession of severe devaluations of the won, and by April 1951, the exchange rate with the US dollar was as high as 6000 KRW.
Between 1953 and 1962, the won was replaced with the hwan, but the won returned in 1962. As before, the won was pegged to the US dollar, this time with an initial exchange of 125:1. The peg rate was again adjusted several times upward during the ensuing years. Finally, in 1997, the Bank of Korea dropped the peg to the US dollar, allowing the South Korean won to float freely in the foreign exchange market.
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With the increasing use of electronic payments in the country, the Bank of Korea is considering totally doing away with the production of won coins. However, the central bank has not taken official action in that regard as of 2020.
With the reintroduction of the won as South Korea’s currency in 1962, the Bank of Korea initially issued coins in denominations ranging from ₩1 to ₩100. However, over the years, inflation led to the ₩1 and ₩5 coins being withdrawn from circulation in 1992. Retailers adjusted prices to minimum price changes of 10 won. Additionally, new coins with a value of 500 won were introduced. As of 2020, there are only four South Korean won coin denominations being minted – ₩10, ₩50, ₩100, and ₩500.
The initial 1962 series of won banknotes came in values that overlapped the coin denominations up to ₩100, only adding a single higher denomination banknote of ₩500. Inflation eventually led to the creation of higher denomination banknotes in the early to mid-1970s – ₩1000, ₩5000, and ₩10, 000.
Krw Usd Monthly Exchange Rate 2023
To combat counterfeiting, various security features, such as color-shifting ink and microprint, were added to South Korean banknotes in the 1990s and into the 21
Century. Further counterfeiting problems spurred the Bank of Korea to issue a new series of banknotes starting in 2006, with each denomination carrying up to 22 separate security features.
The current series of banknotes is printed in the following denominations: ₩1000, ₩2000, ₩5000, ₩10, 000, and ₩50, 000. The ₩500 banknote from the previous series was replaced with a ₩500 coin.
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Gain unlimited access to more than 250 productivity Templates, CFI's full course catalog and accredited Certification Programs, hundreds of resources, expert reviews and support, the chance to work with real-world finance and research tools, and more.By Yi Whan-woo With the Korean won bouncing back against the U.S. dollar, there is growing attention to whether the local currency will continue to gain ground against the greenback, on the back of a string of events this week in the United States and China that raise hope for relief from U.S. inflation as well as the dollar's decline. The won has remained at the 1, 400-won level for more than a month, adding to concerns over economic turmoil in Korea, as this level has only been observed twice before: during the 1997-1998 Asian financial crisis and the 2008-2009 global financial crisis. Under these circumstances, the Korean currency gained strength against the greenback for the second trading session, Tuesday. The won-dollar exchange rate ended at 1, 384.9 won, down 16.3 won from a day earlier after opening at 1, 394.5 won and remaining below 1, 400 won throughout the session.
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U.S. President Joe Biden, right, shakes hands with Maryland Democratic gubernatorial candidate Wes Moore during a rally for the Democratic Party on the eve of mid-term election day at Bowie State University in Bowie, Maryland, Monday. EPA-Yonhap
Analysts said that the won's ascent can be attributed to the U.S. midterm elections, Tuesday, in which the Republicans could make gains in the House of Representatives. The possible gains could mean a curb on the Joe Biden administration's spending, which ―while strengthening the safety net for low-income groups, pandemic-related support and investments in infrastructure ― has been criticized by Republicans for fanning inflation that reached four-decade high of 9.1 percent in June. U.S. inflation has shown no signs of cooling and has remained above market forecasts, with 8.5 percent in July, 8.3 percent in August and 8.2 percent in September. U.S. inflation in October, which is scheduled to be announced Thursday, is anticipated to slip to 7.9 percent. A 7-percent-range inflation can be perceived as an optimistic sign, a Seoul economist said on condition of anonymity, adding, It may allow the U.S. Federal Reserve to take a breather on its aggressive credit tightening in its next rate-setting meeting. The economist was referring to the Fed's December rate-setting meeting from Dec. 13 to 14, which takes into account the October inflation rate in the decision-making process. The Fed delivered the fourth 75-basis-point hike so far this year, raising the once near-zero base rate to the range of 3.75 percent to 4 percent as of November. While the Fed's rate hike added to the persistently strong dollar, some believe that China could be gearing up to shift away from its zero-COVID policies, so in return, it is drawing the attention of investors who prefer safer haven assets such as the U.S. dollar. The market speculates that the Chinese government will find it tough to maintain its lockdown policies, so that is likely to lead to a fall in the dollar's value, said Kim Seung-hyuk, a researcher at NH Futures.
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