The won depreciated more than 5% last month, recording the second-largest decline among major currencies after the Russian ruble. This comes amid delayed expectations for U.S. interest rate cuts and an urgent need for political normalization. The won-to-dollar exchange rate closed at 1,472.5 won at the end of December, down 12.5% for the year. This marks the sixth-largest decline among highly volatile currencies such as the Argentine peso, Brazilian real, and Russian ruble. The rising exchange rate is expected to have negative impacts on the real economy. The Bank of Korea plans to raise December inflation by up to 0.1 percentage points to stabilize prices.
