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The Korean won
Current won since 1962· Asset or instrument
Fact, law or dataA rule, statute, definition or measured number.
South Korea's currency (원), issued by the Bank of Korea; the current won dates from a 1962 currency reform.
See it on the Money & Finance map →How it works
After liberation Korea used a won, replaced by the hwan in 1953; the June 1962 reform swapped 10 hwan for 1 new won. The won was pegged or tightly managed until the 1997 Asian crisis, when it crashed from about 900 to near 2,000 per dollar and was floated. Since then markets set it, with official smoothing. It traded roughly 1,300–1,500 per dollar in 2024–25, weakening after the December 2024 martial-law crisis. Offshore, it trades mainly through forward contracts.
Why it matters
Its swings matter for Korea's exporters, for foreign investors' returns on Korean stocks, and for anyone moving money between the US and Korea.
Facts, rules and data
Bank of Korea records and its ECOS statistics database, IMF documents from the 1997 rescue, and daily exchange-rate data.
Debates and risks
Why the won stayed weak in 2024–25 is debated; heavy US-stock buying by Korean retail 'Western ants' (서학개미) and the National Pension Service are often cited.
Connections (3)
▸The Korean won lost about half its value in Asian financial crisis and Korea's IMF bailout (1997)Fact, law or data
The connection
Korea's central bank spent its dollar reserves trying to hold the won, and once usable reserves ran low it let the currency go. The won fell from about 900 per dollar in mid-1997 to nearly 2,000 by late December, doubling the won cost of companies' dollar debts.
When and why
Seoul, October–December 1997; Korea moved to a free float on December 16, 1997.
How we know
Bank of Korea exchange-rate and reserve records show usable reserves nearly exhausted by December 1997.
Debates and risks
Whether defending the won so long, rather than floating earlier, made the crash worse is debated.
▸The Korean won has floated since 1997 in Exchange rates and currency marketsFact, law or data
The connection
Before 1997, Korea kept the won within a narrow daily band around a 'market average rate'. When the Asian crisis hit, the Bank of Korea burned reserves defending it, then abolished the band on December 16, 1997. Since then exporters, foreign investors and Korean savers set the rate, with authorities smoothing sharp swings. Reserves near $400 billion provide insurance.
When and why
December 1997, amid the IMF rescue; the won, about 900 per dollar in mid-1997, briefly neared 2,000 in late December.
How we know
Bank of Korea records, IMF program documents and daily exchange-rate data.
Debates and risks
The US Treasury has repeatedly put Korea on its currency 'monitoring list', and how often Seoul intervenes remains a point of US–Korea discussion.
▸KOSPI and KOSDAQ: Korea's stock indexes and the 'Korea discount' tend to move with The Korean wonMainstream view
The connection
Foreign investors own roughly a third of Korean shares. When they sell, they convert won to dollars, weakening the currency; when they buy, the won tends to strengthen. Both also react to global risk appetite and chip exports, so KOSPI and the won often rise and fall together.
When and why
Seoul's stock and currency markets, with sharp joint drops in 1997, 2008, 2020 and after the December 2024 martial-law crisis.
How solid is the link?
Bank of Korea and KRX data on foreign flows, and studies showing a positive correlation between Korean stocks and the won.
Debates and risks
The link has loosened as Korean individuals buy US stocks, which means selling won even when KOSPI rises.