Korean Job Discussion Forums

Paddycakes · Joined: 05 May 2003 Location: Seoul

It's doubly bad because your salary goes down (if you send money home), and your earning power here is eroded because imported items will now cost a lot more if they're traded in USD.

Long term though: These things usually go in cycles The won was high for a long time until just recently, now it's going into a slump. In maybe 5 years or so it'll pick up again.

bassexpander · Joined: 13 Sep 2007 Location: Someplace you'd rather be.

I'm trying to take this as a positive. For one, I've got a chunk of cash I want to transfer from the US to here so we can get into a house. When the won is bad, I'll send it over here. Second, if it takes 4 or 5 years for the won to turn around, that'll also be good, because we'd probably be thinking about moving home sometime near then.

aka Dave · Joined: 02 May 2008 Location: Down by the river

The only reason Korea has a current account deficit is high energy prices. I think OPEC is gonna open the spigot a bit just because a US depression doesn't help anyone.

Koreans buying dollars strikes me as not economically rational. The USA's current account deficit is high and is ballooning. There are no signs it will improve any time soon. The USA is going into a recession. As far as I know, Korea is not.

Of course that hurts Korean exports to the US. I read these type of threads but I don't see a lot of economic reasoning. If you can post long term fundamentals why the won is destined for a long slump, please post them. A lot of it to me is the Koreans don't have confidence in their own currency based on the IMF crisis. Of course market psychology is important but fundamentals are important as well. After all, Korea's biggest export market is China, not the USA.

What happened to the Korean economy in the past year that totally devalues the won? Really, oil prices is the ONLY real reason I can think of. And the US economic situation. I simply don't think oil prices are gonna stay so high (especially given a US recession) and the second reason is sort of psychology.

I may be way off base but I just don't get this.

victorology · Joined: 10 Sep 2007

marlow · Joined: 06 Feb 2005

marlow · Joined: 06 Feb 2005

justaguy · Joined: 01 Jan 2008 Location: seoul

It looks like people will have to ride out the storm for a while or just leave.

Trevor · Joined: 16 Nov 2005

Korea is heavily dependent on the U.S. for exports. If the exchange rate is not favorable (or at least tolerable) then the whole Korean economy comes to a halt.

Keep in mind, though, how painful this is to the average korean, not just English teachers. Koreans import tons of stuff and anything they buy outside the country has gone up 30% in the past few months! Obviously, that hurts. Everyone is clamoring for government intervention which means the gov't selling USD in the open market (to lower the exchange rate). The problem is, they are getting low on reserves of USD and don't want to drop their entire load.

In a nutshell,, Korea is very reliant on the US economy and has limited (but not nonexistant) influence over the exchange rate.

BTW, Oil is off over 40% from its high, so that isn't the issue.

Paddycakes · Joined: 05 May 2003 Location: Seoul

brento1138 · Joined: 17 Nov 2004

Hmm, crystal ball eh? OK, lemme check...

Going to ask the 8 ball at http://www.tridelphia.net/

"Will the won get as bad as it did in 1989??"

The response?

"Signs point to yes."

Hehe.

Sigh...

maddog · Joined: 08 Dec 2005 Location: Daegu

I just asked the 8-ball:

"Is Korea sh!t?"

It replied:

"You may rely on it."

ROTLLMFAO

JongnoGuru · Joined: 25 May 2004 Location: peeing on your doorstep

Trevor · Joined: 16 Nov 2005

In 1989, Koreans didn't purchase anywhere near the amount of U.S. goods that they do today. 680 to the dollar would be a hardship to both Korea as well as American exporters. I think it may test those levels, but not as a long-term arrangement -- and if it does, then it also says something about the surrounding economy. Again. leaving Korea in reaction to the currency exchange would simply expose you to the economic problems of wherever you "escape" to.

Ut videam · Joined: 07 Dec 2007 Location: Pocheon-si, Gyeonggi-do

The dollar is appreciating against every major world currency and will continue to do so until the credit crunch eases.

U.S. banks are pooling their dollars stateside to ward off runs by their depositors. Hence, those dollars are not available to be lent on the worldwide currency swap markets. Worldwide dollar demand is far outstripping supply, and that's why the dollar is (counterintuitively) going up against every other currency.

Don't worry, guys. The world hasn't yet digested the fact that the Fed is going to print enough money to "make good" all these bad debts that Wall Street treated like gold. Once the presses start running and people realize this fact, the dollar will go down the toilet�where it belongs under the circumstances.

Real Reality · Joined: 10 Jan 2003 Location: Seoul

Historical Comparison of Korean Won and Japanese Yen

1996 - South Korean Won to 1 USD
January: 787 KRW
February: 780 KRW
March: 781 KRW
April: 780 KRW
May: 781 KRW
June: 798 KRW
July: 813 KRW
August: 818 KRW
September: 822 KRW
October: 828 KRW
November: 831 KRW
December: 842 KRW
http://www.x-rates.com/d/KRW/USD/hist1996.html

1996 - Japanese Yen to 1 USD
January: 106 JPY
February: 106 JPY
March: 106 JPY
April: 107 JPY
May: 106 JPY
June: 109 JPY
July: 109 JPY
August: 108 JPY
September: 110 JPY
October: 112 JPY
November: 112 JPY
December: 114 JPY
http://www.x-rates.com/d/JPY/USD/hist1996.html

And compare the above with the exchange rate in 2008.

2008 - South Korean Won to 1 USD
January: 942 KRW
February: 944 KRW
March: 982 KRW
April: 987 KRW
May: 1035 KRW
June: 1031 KRW
July: 1016 KRW
August: 1044 KRW
September: 1131.89 KRW
October: 1212.88 KRW
http://www.x-rates.com/d/KRW/USD/hist2008.html

2008 - Japanese Yen to 1 USD
January: 108 JPY
February: 107 JPY
March: 101 JPY
April: 103 JPY
May: 104 JPY
June: 107 JPY
July: 107 JPY
August: 109 JPY
September: 107 JPY
October: 106 JPY
http://www.x-rates.com/d/JPY/USD/hist2008.html

Korean Won to USD
1992 - 2,000,000 won at 767 KRW to US$1 (January 1992)........ $US2608........
1993 - 2,000,000 won at 795 KRW to US$1 (January 1993)........ $US2515........
1994 - 2,000,000 won at 813 KRW to US$1 (January 1994)........ $US2460........
1995 - 2,000,000 won at 793 KRW to US$1 (January 1995)........ $US2522........
1996 - 2,000,000 won at 787 KRW to US$1 (January 1996)........ $US2541........
1997 - 2,000,000 won at 854 KRW to US$1 (January 1997)........ $US2341........
2005 - 2,000,000 won at 1000 KRW to US$1 (February 2005) ........ $US2000........

Japanese Yen to USD
1992 - Japanese Yen to 1 USD January: 125 JPY, February: 128 JPY
1993 - Japanese Yen to 1 USD January: 125 JPY, February: 121 JPY
1994 - Japanese Yen to 1 USD January: 111 JPY, February: 106 JPY
1995 - Japanese Yen to 1 USD January: 100 JPY, February: 98 JPY
1996 - Japanese Yen to 1 USD January: 106 JPY, February: 106 JPY
1997 - Japanese Yen to 1 USD January: 117 JPY, February: 123 JPY
2005 - Japanese Yen to 1 USD January: 103 JPY, February: 105 JPY
http://www.x-rates.com/cgi-bin/hlookup.cgi