Why Korean won swings more than peers

Posted 3 hours ago by

The korea Herald News

The Korean won tends to be more volatile than major currencies due to limited depth in the foreign exchange market, or a lack of sufficient buy and sell orders across price levels, Bank of Korea economists said Thursday. A recent central bank paper shows the won reacts more strongly to capital outflow shocks than currencies in advanced economies. Korea’s estimated sensitivity to such shocks stands at 0.65 — slightly below the emerging market average of 0.71, but well above Japan’s 0.38 — indicat