ING Predicts 14% Drop in Korean Won Against US Dollar by 2024

Korean Won Forecast: A 14% Decline Predicted in 2024

ING Group has projected that the Korean won is expected to weaken by 14% against the US dollar in 2024, potentially reaching an exchange rate of 1,472.50. This forecast, disclosed by Jinshi Data, paints a concerning picture for South Korea's currency, which may face further depreciation to 1,500 by 2025.

Factors Influencing the Depreciation

According to economist Min Joo Kang, several key factors contribute to this negative outlook:

• Federal Reserve's Monetary Policy: The Federal Reserve's slower pace of interest rate cuts is a significant reason why the Korean won may continue to lose value.
• Escalating Trade Tensions: Ongoing trade disputes affect investor confidence and contribute to currency volatility.
• Political Instability in South Korea: Domestic political challenges hinder economic stability and investor sentiment.
• Widening Bond Yield Gap: The increasing disparity between US and South Korean bond yields amplifies pressure on the won.

Quarterly Exchange Rate Forecast for 2024

ING Group's exchange rate projections for the Korean won against the US dollar for each quarter of 2024 are as follows:

1. Q1 2024: 1,475
2. Q2 2024: 1,500
3. Q3 2024: 1,450
4. Q4 2024: 1,425

Conclusion: A Challenging Year Ahead

The combination of these factors suggests that the South Korean currency will face a challenging year in 2024, with potential risks associated with economic policies and geopolitical uncertainties. Stakeholders need to remain vigilant and responsive to global economic cues to navigate this uncertain landscape effectively.