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Omkara
Joined: 18 Feb 2006
Location: USA
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 Posted: Tue Mar 03, 2009 8:36 pm Post subject: |
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| But then, on a national scale, what does such a seemingly minor adjustment to the exchange rate add up to? |
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cedarseoul
Joined: 16 Feb 2008
Location: nowon-gu
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| Posted: Tue Mar 03, 2009 9:58 pm Post subject: |
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| JFuller317 wrote: |
| Some intervention. So instead of yesterday's 1575 on xe, right now we have 1557. I wonder how many billions it took to get a whopping 18 point reduction in the rate. |
$700-800mil, it would seem (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aF8pwphOnZTI).
But you shouldn't look only at the won's rise; you should consider its potential loss. Short of that intervention, the won most likely would have broached 1600 yesterday or today.
Government intervention in and of itself isn't going to turn the local currency around - but it's a sharp caution for investors who are betting solely against the won. Improving investor sentiment (demonstrating that the won isn't in unchecked freefall and reminding them that Korea's fundamentals are relatively strong) will be key to stabilizing the market. |
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poet13
Joined: 22 Jan 2006
Location: Just over there....throwing lemons.
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| Posted: Tue Mar 03, 2009 9:58 pm Post subject: |
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1535 at Kb.
On a national scale, the last 24 hours swing is about 4%. That's pretty whack for a major currency. I like it though.... |
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JFuller317
Joined: 10 Oct 2008
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| Posted: Tue Mar 03, 2009 10:23 pm Post subject: |
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I don't even care about 1100 anymore. Just give me <1450 and I'll send home millions.
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| Government intervention in and of itself isn't going to turn the local currency around - but it's a sharp caution for investors who are betting solely against the won. |
I just hope that someday, someone out there loses millions of dollars by betting solely against the won and ends up killing himself. That would almost make this misery worth it. |
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Yu_Bum_suk
Joined: 25 Dec 2004
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| Posted: Tue Mar 03, 2009 10:40 pm Post subject: |
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| Omkara wrote: |
| But then, on a national scale, what does such a seemingly minor adjustment to the exchange rate add up to? |
On the world market, a short-lived rise that ends when speculators think it's peaked. Until there's a genuine belief that for whatever reason people will be motivated to start buying more won, it's a trend that's very hard to reverse. A government programme to clear the way for more, easier, FDI would do more than anything, but that's where national pride still seems to trump national pocketbook at the moment. |
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Adventurer
Joined: 28 Jan 2006
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| Posted: Tue Mar 03, 2009 11:11 pm Post subject: |
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| Yu_Bum_suk wrote: |
| Omkara wrote: |
| But then, on a national scale, what does such a seemingly minor adjustment to the exchange rate add up to? |
On the world market, a short-lived rise that ends when speculators think it's peaked. Until there's a genuine belief that for whatever reason people will be motivated to start buying more won, it's a trend that's very hard to reverse. A government programme to clear the way for more, easier, FDI would do more than anything, but that's where national pride still seems to trump national pocketbook at the moment. |
I don't expect the currency to get any better in the short-run. It could go to 1650 by April. That's why I've cut back on my spending. I hardly eat out now except on weekends. I am sending money back home as soon as I get a paycheck. I know some want to hold on to their money. However, why risk it. The US economy is somewhat shaky, and Korea likes their currency low, so they can export. Those who want to send their children abroad may have some problems, though. |
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Robot_Teacher
Joined: 18 Feb 2009
Location: Robotting Around the World
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| Posted: Tue Mar 03, 2009 11:19 pm Post subject: |
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It computes in this robots CEO based finance enumerating CPU that we're losing substantial amounts of money with being paid in green man won notes instead of US dollars; possibly being off by 50% inside 1 year. According to the history of the Won in the history of the world, 950 to 1000 per US dollar is standard par for the course, but something unexplainable happened last October and it still stands uncorrected. They also say the US dollar is gaining strength which is unexplainable as the US economy is tanking out upside down wrong side up.
Where is my 1000 won to the dollar my recruiter promised?
My 1 million won is no longer worth $1000 as expected, but a paltry $640 at 1551 won to the US dollar. At the bank, it's probably more like 1590 to the dollar in reality making my 1 milion won worth only about $625.
Where is my escape from bad macro economics? |
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Yu_Bum_suk
Joined: 25 Dec 2004
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| Posted: Tue Mar 03, 2009 11:25 pm Post subject: |
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| Robot_Teacher wrote: |
It computes in this robots CEO based finance enumerating CPU that we're losing substantial amounts of money with being paid in green man won notes instead of US dollars; possibly being off by 50% inside 1 year. According to the history of the Won in the history of the world, 950 to 1000 per US dollar is standard par for the course, but something unexplainable happened last October and it still stands uncorrected. They also say the US dollar is gaining strength which is unexplainable as the US economy is tanking out upside down wrong side up.
Where is my 1000 won to the dollar my recruiter promised?
My 1 million won is no longer worth $1000 as expected, but a paltry $640 at 1551 won to the US dollar. At the bank, it's probably more like 1590 to the dollar in reality making my 1 milion won worth only about $625.
Where is my escape from bad macro economics? |
It's not that hard to explain: in a global financial crisis there's an increased demand for the world's largest currency.
You're escape would have been to find a job in a country with a more stable currency, like say one on the other side of the 동해, but it's a bit late now that you've bet on the wrong horse.
That a country with such a cheap currency is still doing just as badly or worse as other industrialised countries when it comes to exports is a bit scary, though. |
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poet13
Joined: 22 Jan 2006
Location: Just over there....throwing lemons.
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| Posted: Wed Mar 04, 2009 1:01 am Post subject: |
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Once again, the only way you are losing money is if you exchange it. 2.5 million won today is the same 2.5 million won it was last summer. It buys a little less because the price of a lot of imported goods have gone up and there's been some inflation, but essentially, if you buy local, you're purchasing power is nearly the same as last year.
I think a lot of people are being shortsighted. Look at the bigger picture. I believe that eventually, this will pass. I believe the Won will recover to something we can all appreciate. But it will take time. Those dollars you're buying are crazy expensive.
Think about this. For the doomsayers who predict that the new parity is 1600 or 2000 won to the dollar; is it really logical that in a very few months, that the worlds 14th (WB) largest economy by GDP lost nearly half its value, and that that is permanent?
Ok, my economics are super sketch on that, but what I'm saying is that I cannot believe that this currency devaluation is permanent. |
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Adventurer
Joined: 28 Jan 2006
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| Posted: Wed Mar 04, 2009 2:20 am Post subject: |
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| poet13 wrote: |
Once again, the only way you are losing money is if you exchange it. 2.5 million won today is the same 2.5 million won it was last summer. It buys a little less because the price of a lot of imported goods have gone up and there's been some inflation, but essentially, if you buy local, you're purchasing power is nearly the same as last year.
I think a lot of people are being shortsighted. Look at the bigger picture. I believe that eventually, this will pass. I believe the Won will recover to something we can all appreciate. But it will take time. Those dollars you're buying are crazy expensive.
Think about this. For the doomsayers | | | |
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