USD/KRW Exchange Rate: Historical Highs, Lows, and What They Mean
This article explains why the dollar became dominant, Korea’s exchange rate system, and most importantly, the historical highest and lowest USD/KRW levels based on widely accepted standards.
Why the US Dollar Dominates Global Exchange Rates
The US dollar became the world’s primary reserve currency after World War II, supported by the Bretton Woods system, the size of the US economy, and the depth of US financial markets. Even after the gold standard ended in 1971, global trade, energy pricing, and international finance continued to rely on the dollar.
As a result, countries like South Korea are highly sensitive to changes in US monetary policy and global dollar demand.
How the USD/KRW Exchange Rate Is Determined
South Korea operates under a floating exchange rate system.
The USD/KRW rate is determined by supply and demand in the foreign exchange market, while the Bank of Korea intervenes only to smooth excessive volatility.
It is important to distinguish between:
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Intraday rates (real-time market prices)
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Closing rates (end-of-day reference)
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Official reference rates used for customs and accounting
Historical Highest USD/KRW Exchange Rate
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Intraday all-time high:
Approximately 1,995 KRW per USD
December 1997, during the Asian Financial Crisis
During this period, capital flight and a collapse in investor confidence caused the Korean won to depreciate sharply. Market panic pushed the exchange rate close to 2,000 KRW per dollar in intraday trading.
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Highest closing rate:
1,707.30 KRW per USD
January 1998
This is the most commonly cited official historical high, based on confirmed closing data.
Historical Lowest USD/KRW Exchange Rate (Meaningful Comparison)
Some sources mention extremely low figures from the 1950s or 1960s, such as “50 won per dollar.”
However, these figures are not comparable to today’s exchange rate because:
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Korea used a different currency unit (hwan) at the time
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The exchange rate was fixed by the government
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A major currency reform occurred in 1962
For practical and modern analysis, economists focus on the floating exchange rate era.
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Lowest USD/KRW level (floating system):
Approximately 902 KRW per USD
October 2007
This occurred just before the Global Financial Crisis, during a period of strong exports, capital inflows, and a weak US dollar globally.
Why These Extremes Matter Today
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A strong dollar benefits Korean exporters but increases import costs and inflation
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A strong won reduces import prices but can pressure export competitiveness
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Exchange rates reflect global risk sentiment, interest rate differentials, and capital flows
Rather than predicting exact levels, most analysts view exchange rates as a risk management variable, not a target.
Final Thoughts
The USD/KRW exchange rate has ranged from near 2,000 during crisis periods to around 900 during times of global optimism. These historical extremes highlight how closely Korea’s currency is tied to global financial conditions.
Understanding this context helps foreign readers interpret today’s exchange rate movements with greater clarity and realism.
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