(Seoul = Yonhap Infomax) Reporter Kyung-rim Kim = The Korean Chamber of Commerce and Field has predicted that the exchange level won by the greenback will keep on to rise right until the initial half of following 12 months.
The Sustainable Growth Initiative (SGI) beneath the Korea Chamber of Commerce and Field (KCCI) noted 4 that it would be challenging to take care of the dollar power in a shorter time period of time thanks to problems about a global economic economic downturn and plan normalization US monetary coverage.
The exchange rate received by the greenback continued to increase right after coming into the 1,200-acquire vary in February, achieving the mid-vary of 1,300.
The report pointed to the normalization of financial guidelines in each and every place, the Russia-Ukraine crisis, the deterioration of the equilibrium of payments and considerations about a world-wide economic recession as the backdrop to the soaring exchange amount.
In the system of normalizing the accommodative financial procedures applied in each and every country because of to the novel coronavirus (COVID-19) infection, the US Federal Reserve (Fed) has raised the benchmark curiosity rate 4 times this 12 months alone and gained the dollar. has increased drastically.
Likely forward, the US financial coverage stance is also anticipated to emphasis on rate security and sustain austerity until the end of up coming calendar year.
In the dot chart published on 6, the median curiosity rate at the stop of this 12 months was 3.4% and at the stop of next year it was 3.75%.
The report predicts that the upward trend of the USD-KRW trade amount is incredibly probably to be managed until finally the initially half of subsequent year together with the stance of US financial policy.
The report cited a reduce in savings and an increase in earnings and the growth of expense abroad due to the quick growing old of the inhabitants as long-term will cause of the boost in the exchange amount.
He also pointed out that though the Korean economy has developed on the basis of a surplus in items and trade balance by means of exports, the new strengthening of the greenback is unlikely to lead to an enhance in corporate earnings.
In addition, the amplified curiosity load on international currency credit card debt could bring about expense to deal, and domestic costs are feared to increase because of to the tariff burden on imported crude oil, the report claimed.
In response to these issues, the report pressured that countermeasures these types of as lowering crude oil tariffs, signing forex swaps and widening the exchange level fluctuation insurance policies limit are necessary.
Min Kyung-hee, researcher at SGI at the Korean Chamber of Commerce and Industry, reported: “In a circumstance where by the risk of a international financial recession is escalating, coverage steps for marketplace stabilization really should be actively executed in so that hazard elements do not distribute into economic and actual economy crises. “Attempts should really be created to relieve sensitivity to exchange costs, these as diversification of payment currencies,” he advised.
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