The South Korean won strengthened to around 1,481 per dollar, rebounding from the previous session and nearing its highest level since mid-May, supported by the government’s latest push to internationalize the currency. Authorities unveiled new measures to improve foreign access to the won, including allowing overseas financial institutions to borrow won through temporary overdrafts and to use won-denominated bonds as collateral in financial transactions. These steps build on the recent launch of a 24-hour dollar-won trading market.
The won was also underpinned by monetary policy, after the Bank of Korea raised its benchmark interest rate by 25 basis points to 2.75% last week, initiating a new tightening cycle aimed at curbing inflation and shoring up the currency. At the same time, escalating tensions in the Middle East pushed oil prices higher and increased demand for the safe-haven US dollar, amid renewed concerns over inflation and the outlook for US interest rates.
