We analyze the causes of the persistent 1,500-won-level exchange rate, despite a current account surplus, through the perspectives of overseas investment by local retail investors, foreign capital outflows, and unstable international conditions.
Imagine this: You visit a currency exchange to go on an overseas trip for the first time in a while, only to find you need to pay much more won than you saw yesterday to exchange for dollars. Thinking, ‘Why is it so much more expensive than yesterday?’, you turn on the news and hear the report that the exchange rate has surpassed 1,500 won. Why is this exchange rate, which hits our wallets directly, showing no signs of coming down?
Why It Matters
A high exchange rate means the value of our currency (the won) has fallen by that much. This is not just a matter of numbers. The price of imported goods rises, making groceries more expensive, and costs for overseas travel or studying abroad skyrocket. Many analysts are concerned about the impact this high-exchange-rate situation will have on the health of the entire economy. Source 4
The Explainer
Simply put, the exchange rate is a kind of price tag comparing the ‘value of money between countries.’ To use an analogy, it is the amount of won needed to buy a product called the dollar.
Rising exchange rates mean you have to pay more won than before to buy a unit of foreign currency. It is similar to the price of an apple rising when you try to buy one. The main causes of the high exchange rate are analyzed as follows:
- Overseas investment by ‘Seohak ants’ (retail investors): It is pointed out that the process of locals exchanging won for dollars to buy overseas stocks acts as upward pressure on the exchange rate. Source 3, Source 16
- Foreign investor exodus: When foreign investors sell domestic stocks and exchange them for dollars to repatriate their funds, a shortage of dollars in the country causes the value of the won to fall. Source 5
- Unstable world situation: When the world becomes noisy, like the war in the Middle East, people seek safe places. In such times, everyone looks for the dollar, considered the most powerful safe asset, which causes the dollar’s price to soar. Source 6
Where We Stand
On May 22, 2026, the won-dollar exchange rate soared to 1,517 won during trading. Source 2, Source 18 Generally, if a country has a ‘current account surplus’ where it earns money by exporting a lot, the exchange rate should be stable, but an exceptional situation where the value of the won is falling continues. Source 2, Source 18
In response, foreign exchange authorities are busy taking measures, such as verbal intervention, to calm excessive market anxiety. Source 2, Source 18
What’s Next
The situation ahead is not easy. Global macroeconomic factors, such as rising oil prices due to unstable international situations and high US Treasury bond yields, are strengthening the power of the dollar. Source 6 The market is keeping a close eye on what clever solution the foreign exchange authorities might find and how the major flows of the global economy will change. Source 8
MindTickleBytes AI Reporter’s View
The exchange rate is like a ripple on the great wave of the economy. While the actions of individual investors are important, we need an eye for the bigger wave—the global financial environment—and where it is leading the Korean economy. In a high-exchange-rate situation, it is time to look back at the fundamental health of our economy.
References
- Exchange Rate Defense, Plugging the Broken Dam: Seohak Ants, Foreign Selling, and the Bank of Korea …
- Seohak Ants Decreased but Won Value Plunged… Authorities Now Targeting Foreign Selling : Nate News
- Seohak Ants Decreased but Won Value Plunged… Authorities Now Targeting Foreign Selling
- Seohak Ants → War → Foreign Selling → Strong Dollar… Only the Bad News Changes, the Exchange Rate Doesn’t Break
- Seohak Ants Decreased but Won Value Plunged… Authorities Now Targeting Foreign Selling
- Seohak Ants Decreased but Won Value Plunged… Authorities Now Targeting Foreign Selling
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[Foreign Exchange Market News The Korea Economic Daily](https://www.hankyung.com/economy/forex) -
[[Ha Hyun-ok’s Perspective] If You Strike Seohak Ants, Will the Exchange Rate Fall? JoongAng Ilbo](https://www.joongang.co.kr/article/25382523) - [What’s the Economy] Is the High Exchange Rate Due to Seohak Ants? Due to Delayed Interest Rate Hikes? Why Is the Exchange Rate Rising? - Kyunghyang Shinmun
- ‘Ping-Pong Game’ Over ‘Exchange Rate’ Between ‘Government’ and ‘Seohak Ants’
- When the Exchange Rate Fell, ‘Actually It’s Good’… Seohak Ants Bought Fearlessly [Analysis+]
- Seohak Ants Shaken by War and Exchange Rate Shock… Giving Up ‘M7’ and Betting on ‘Leverage’
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[What Should We Do About Seohak Ants… Foreign Exchange Authorities Deep in Thought Over High Exchange Rate Yonhap News Agency](https://www.yna.co.kr/view/AKR20251127144200002) -
[150 Trillion Won Carried to the US Stock Market… Seohak Ants That Shook the Exchange Rate The Korea Economic Daily](https://www.hankyung.com/article/2025111816041) - Bank of Korea Finally Declares Exchange Rate War “Dollar Supply Bomb” … Seohak Ants New York Stock Market…
- Seohak Ants Decreased but Won Value Plunged… Authorities Now Targeting Foreign Selling - Maeil Business Newspaper
- A sharp decrease in domestic interest rates
- Increased overseas stock investment by locals and foreign capital outflows
- A sharp decline in domestic corporate export performance
- It is a very common economic phenomenon
- It is evaluated as an exceptional phenomenon
- There is no relationship between the current account and the exchange rate
- It lowers the value of the dollar
- It increases the value of the dollar due to safe-haven preference
- It lowers the value of the dollar regardless of international oil prices