Korean Won's Real Value Rises to 85.50, Bouncing Back After Six Months

In July, the real effective exchange rate (REER) of the Korean won rose to 85.50, up 2.45 points from June's 83.05, marking a rebound after six months. According to the Bank for International Settlements (BIS), this is the first increase compared to the previous month since January. The real effective exchange rate reflects the real value of a currency by accounting for the differences in currency and price levels of trading partner countries. The BIS's benchmark value is set at 100 in 2020, meaning that an increase in the index indicates an appreciation of the real currency value. The won remained on the lower end among the 64 countries surveyed, with the Japanese yen at the lowest at 65.04. The Indonesian rupiah was recorded at 87.98, the Indian rupee at 90.37, and the Chinese yuan at 92.72, while the real effective exchange rate of the US dollar stood at 108.25. This rebound is related to the decline in the dollar-won exchange rate, with increased dollar selling by exporting companies and a decrease in foreign stock fund outflows cited as factors improving the foreign exchange market supply and demand. Changes in the won exchange rate affect the won-denominated prices of dollar-denominated assets such as Bitcoin (BTC) and Ethereum (ETH). The BIS publishes effective exchange rate statistics on a monthly and daily basis, with the next release scheduled for August 27.