Wednesday, September 17, 2008

Ouch: The Falling Won

The bankruptcies in the US have hit the Korean market hard.  Apparently the won took its biggest dive in 10 years.  Here’s a chart from Google Finance showing the plummeting won in the 11months since I’ve been back in Korea:  (click the chart to get the live numbers in a new window)


That line in the middle—.00100—is the line where the won is trading even when the dollar.  The won has lost 20 percent of its value in the last 11 months compared to the US dollar—most of that since March.  For someone sending most of their money home, its like getting a cosmic 20% paycut.

Costs here have stayed relatively the same.  The price of rice has gone up, so some of my favorite restaurants have raised their prices on rice-based dishes.  Tuna kimbap has gone from W 1,500 to 2,000.  Bibimbap at my favorite lunch place went from W4,500 to W6,000.  However, I mostly take the hit when I’m sending my money home.

For my first year, the won was trading at roughly W1,000 to 1.09.  So, I was getting an extra nine cents in the rough exchange rate where a chun (W1,000) is roughly equal to a buck ($1).  Now, I’m losing almost 11 cents every dollar.  I got paid today and was going to transfer some money home, but I’m hoping that the upswing that the US markets are seeing right now will translate over here and I won’t take as big of a hit when I go to exchange my money.

Comeon Korean economy give it your best for the next 28 days…

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