S. Korea sees hike in dollar’s value, consumer confidence
December 14, 2003
SEOUL — While the dollar has traded weakly against the yen and euro, it has slightly gained against the won in recent weeks, according to South Korean economists. And while the rise in exchange rates might be small, soldiers and vendors hope it will provide a boost for the holiday shopping season.
The dollar has strengthened a bit against the won due to South Korea’s favorable trade balance with the United States, Park Hyun-soo of the Samsung Economic Research Institute said Thursday.
In September, the dollar sat below 1,150 won, following a steep decline that began in earnest in April 2003.
Thursday, the commercial exchange rate had risen to 1,186 won per dollar.
But anticipating what the dollar will be like in the future is “extremely hard,” said Park, but it’s likely to be weakened again soon, considering the general flow of the dollar worldwide.
South Korea’s consumer sentiment has improved since October after hitting its lowest point in September, and more consumption is expected this month approaching Christmas and the New Year holiday, said Lee Hyong-il, of South Korea’s Finance and Economy Ministry.
However, Park takes a pessimistic view about the “Christmas bounce” in South Korea, saying consumers still feel uneasy about their futures and may want long- term financial security.
“With the strengthened dollar, foreigners might be in a better position spending dollars for holidays, though,” Park said.
Soldiers seem to agree.
“I don’t see too much difference in the exchange rate, but it’s been good enough that I think it’s worth my while to do more shopping in town,” said Sgt. Efren Lopez, a Yongsan Garrison soldier shopping for coats at a store near the base’s Gate 3.
“My family back in the States say the economy has changed their plans, but not for me here.”
Some shopkeepers are feeling a pinch, though.
Oh Myong-mo, owner of the Manchester custom-made clothing store in Itaewon, is one.
Previously, four to five customers visited his store everyday to have custom suits made; these days, Oh sometimes spends an entire day without greeting even one customer.
“For now, I can’t expect anything for the coming holidays. The economy is so slow lately,” Oh said.