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Won-dollar volatility hits 4-year high in 2015

Jan. 14, 2016 - 13:04 By KH디지털2
Volatility in the won-dollar exchange rate hit a four-year high last year as the foreign exchange market seesawed over a potential U.S. rate hike and lingering global market uncertainties, central bank data showed Thursday.

The daily foreign exchange variation of the won-dollar rate averaged 0.58 percent in 2015, marking the highest level since 2011, when the figure hit 0.64 percent, according to the data compiled by the Bank of Korea.

The figure refers to how much the rate changes compared with the previous day's closing price.

The average gap between the intra-day high and low reached 6.6 won last year, up from the previous year's 4.9 won, according to the data. In 2011, the figure hit 7.2 won.

The variation fell from 6.8 won in the first quarter to 5.9 won in the following three months but surged to 7.4 won in the third quarter before coming to 6.3 won in the October-December period.  

"The larger fluctuations were attributable to jitters ahead of the rate hike in the U.S., risks stemming from Greece's default and concerns over China's slowdown, among others," the BOK said in a release. 

The greater volatility was shared by major economies, with the variation at the Group of 20 nations coming to 0.53 percent on average in 2015, up from the previous year's 0.38 percent, according to the BOK.

Market watchers forecast that the won-dollar rate would continue to wobble this year due mainly to shaky emerging economies following the U.S. rate decision and ample signs of China's slowdown. Coupled with unfavorable external factors, North Korea's fourth nuclear test last week further stoked geopolitical risks in the region.  

On Wednesday, the local currency closed at 1,204.00 won against the greenback, up 31.5 won from the close at the end of last year.

In 2015, the daily FX turnover grew 12.1 percent on-year to an average of $23.58 billion, according to the central bank. (Yonhap)