[Diary Point = Reporter Eom Ju-yong] The won-dollar exchange rate dropped to the low 1,320s, marking its lowest level in roughly two years. The weekly closing rate in the Seoul foreign exchange market on October 26 was 1,323.1 won, the lowest since October 2, 2024, when it closed at 1,319.3 won.
The main driver behind the won's strength is a surge in dollar inflows thanks to robust semiconductor exports, along with increased dollar-selling by exporters converting their dollar holdings into won. The Bank of Korea's August 2026 current account data also showed a surplus of $46.11 billion, reinforcing the ample dollar supply.
If the Rate Drops from 1,400 to 1,320, Exchanging $1,000 Costs 80,000 Won Less
For households planning overseas trips, the direct benefit is being able to buy more dollars with the same amount of won. If the exchange rate falls from 1,400 won to 1,320 won when exchanging $1,000, the principal cost — excluding fees — drops by 80,000 won.
Overseas online shopping also becomes cheaper in won terms when purchases are billed in dollars. However, card companies may add international brand fees and overseas usage fees separately, and the exchange rate on the payment date can differ from the order date, so shoppers shouldn't calculate savings based on the listed price alone.
Import Prices, Deposits and Stocks Are Affected Differently
A stronger won tends to lower the won-converted cost of dollar-priced imports such as crude oil, gas, grains and parts, which eases inflationary pressure. However, actual retail prices don't adjust immediately, since contract timing and inventory levels vary.
Holders of dollar deposits may see their won-converted value decline. For won deposit holders, the falling exchange rate doesn't change interest rates directly, but if the goal is to buy dollars, the same amount of won now buys more dollars.
Overseas assets exposed to currency fluctuations, such as U.S. stocks or dollar-denominated ETFs, may see lower won-converted returns even if the underlying share price stays the same. Domestic exporters' stock prices could face pressure as a stronger won reduces the won value of export earnings, while companies reliant on imports may benefit from lower input costs — meaning the impact varies widely by sector.
It's Safer Not to Exchange All at Once
The U.S. Federal Open Market Committee is scheduled to meet from October 27 to 28. If expectations for a U.S. rate cut weaken or the Fed signals a hawkish stance, the dollar could strengthen again, causing the won-dollar rate to rebound — making predictions of the rate falling into the 1,200s far from certain.
For those with travel plans, a more practical approach is to exchange part of the needed dollars now and spread out the rest over time, rather than betting everything on a single rate forecast. Comparing banks' cash exchange rates, preferential rates, and card fees can help minimize the actual cost.