20000 Won – South Korea

In 2006, South Korea's currency situation was characterized by a period of significant appreciation for the Korean Won (KRW) against the US Dollar, driven by strong economic fundamentals and substantial capital inflows. The year saw the won strengthen to its highest level in nearly a decade, approaching the psychologically important 900 won per dollar mark by the end of the year. This appreciation was fueled by a robust current account surplus, record-breaking exports, and a surge in foreign investment into the Korean stock market, as investor confidence grew in the nation's advanced technology and manufacturing sectors.

This strong won presented a complex policy challenge for the South Korean government and the Bank of Korea (BOK). While a stronger currency boosted the nation's purchasing power and helped contain import-driven inflation, it also threatened the price competitiveness of key export industries, such as automobiles, shipbuilding, and electronics, which were the primary engines of economic growth. Authorities intervened cautiously in the foreign exchange market to smooth volatility and slow the pace of appreciation, while also implementing capital flow liberalization measures to reduce upward pressure on the currency.

Overall, the 2006 currency dynamic reflected South Korea's successful emergence from the 1997 Asian Financial Crisis as a mature and globally integrated economy. The won's strength was a testament to the country's economic resilience and attractiveness to foreign capital. However, it also underscored the ongoing vulnerability of its export-dependent growth model to exchange rate fluctuations, setting the stage for continued careful management by monetary authorities in the years to follow.