South Korea has seen the biggest drop in its real effective exchange rate among emerging countries when compared with the value before the start of the 2008 global financial crisis, data showed Sunday.

As of the end of last year, the won’s real effective exchange rate was 20.6 percent lower than its pre-crisis level, according to the data by the Institute of International Finance.

The decline was far higher than 9.7 percent for Mexico, 6.1 percent for India, 3.3 percent for Turkey and 1.7 percent for South Africa.

In contrast, Brazil chalked up a 49.1 percent surge in its real effective exchange rate, followed by Russia with 36.6 percent, the Philippines with 24.9 percent, China with 22.5 percent and Indonesia with 8.8 percent.

The real effective exchange rate refers to an index that describes the relative strength of a currency relative to a basket of other currencies, reflecting trade volume and inflation. The lower a country’s real effective exchange rate, the more undervalued its currency relative to a basket of other monetary units.

The data compares exchange rates as of the end of 2012 with average exchange rates between 2003 and 2007.

Market watchers said that the South Korean won’s relative undervaluation points to a lower possibility of capital flight from the country in the event of global financial uncertainty. (Yonhap News)