The Korean won is rapidly depreciating against the U.S. dollar... on expectations that the U.S. Federal Reserve will raise its interest rate soon.
But these currency conditions are not expected to have a profound impact on Korean exports.
Our Kim Ji-yeon tells us why.
The Korean won has been depreciating against the U.S. dollar this month,... mainly due to the strengthening of the U.S. currency.
In the month of March,... the won weakened about two-and-a-half percent against the greenback... to close at one-thousand-126 won on Thursday.
The Seoul-based Daishin Economic Research Institute expects the won-dollar exchange rate to decline even further to one-thousand-150 won within the next two months.
This,... on expectations the U.S. Federal Reserve will raise its rate in the coming months -- and possibly sooner.
"The overlying projection is that the Fed will raise its interest rate in April. We even think there's a possibility that it may raise the rate in its upcoming Federal Open Market Committee meeting next week... due to improved unemployment figures in February."
Since the depreciation of the Korean currency stems mainly from the strengthening of the U.S. dollar, rather than strong economic fundamentals,... local analysts say it won't have a profound impact on boosting the competitiveness of Korean exports.
Busan-based B-S Financial Group says that's because the currencies of other Asian countries such as the Japanese yen are also depreciating against the dollar.
"The types of goods exported by Korea and Japan, including steel and automobiles, and their competitiveness comes from the valuation of their local currencies. The already much-depreciated yen is gaining the upper hand over the Korean won, due to a series of quantitative easing measures from Tokyo since late 2012."
In the month of March alone, the Japanese yen weakened about two percent against the greenback.
The B-S Financial Group researcher predicts the yen will reach the 130 yen level agains