원화가격, 23개월째 강세...경제 회복에 걸림돌 되나?

Our next story is on the continuous appreciation of Korean currency against US dollar and its implications for the South Korean economy.
For more on this, we turn to Lee Kyung-min from the Korea Times who is on the line for us.
Good morning Kyung-min, how did the Korean won perform last week?
The local currency won has been strengthening rapidly over the past few weeks, hitting a 23-month high.
The currency closed at 1114.80 won against the dollar last Thursday, down 4.8 won from the previous session.
But it was largely considered a breather following a 50 won increase over the past month.
The soaring won is attributable mostly to the weakening of the U.S. dollar after the Biden administration is set to inject a massive stimulus package of over $2.2 trillion during his term.
The clear expansionary-leaning stance will be maintained or amplified further due to the bleaker prospects of a global economic recovery, a key driver of the dollar losing value.
Other factors also making the U.S. currency cheaper include diminishing global economic uncertainties, including those surrounding the U.S. presidential election.
A drop in uncertainty in the market means a corresponding decrease in investors’ risk appetite.
The U.S. dollar and gold are among the key “safe-haven” alternative investment vehicles compared to equity market investment.
The Korean won is gaining ground against key global reserve currencies, including the Japanese yen, and the euro over the past few months.
It has been moving largely in sync with the Chinese yuan.
Ever since the won hit an 18-month high of 1,130 a few weeks ago, market watchers have been saying that it could drop further to 1,100 won to the dollar.
Now Kyung-min, what does this signal for the Korean economy?
The soaring won bodes ill for local export firms, especially since Korea is an export-reliant economy.
Korea is highly vulnerable to the performance of the global economy.
If the local currency continues to appreciate, it will hurt their competitive edge in the global market.
This is highly worrisome, because the poorer-than-expected performance of local export firms will tighten domestic consumption.
The prospect of a much-awaited economic recovery will become more elusive.
Korea’s top growth driver industries, such as manufacturers of chips and displays as well as automakers, are becoming increasingly unsettled by the local currency hitting new highs.
This is because their earnings in dollars converted to Korean won will lead to substantial losses.
But other big industries such as steelmakers and petrochemical firms will see a limited impact.
That is because a stronger won can help them reduce purchase costs of raw materials, while final products will be sold at higher-than-usual prices.
But it spells more significant problems for SMEs, which account for 99 percent of the firms here.
Unlike large conglomerates that have a variety of measures to hedge currency risks, SMEs without such