What Is the Korean Won (KRW)?
The Korean won (KRW) is the resident currency of South Korea. Its users denote the won by using the symbol “₩,” as in “₩1,000.” Since 1950, it has been prosecuted by the nation’s central bank, the Bank of Korea. The won is fully convertible and is routinely traded against other global currencies, such as the U.S. dollar (USD), the Japanese yen (JPY), and the euro (EUR). One won is detached into 100 subunits, called “jeon.”
As of September 2020, 1 U.S. dollar is equal to approximately 1,200 KRW.
- The Korean won (KRW) is the native currency of the Republic of South Korea.
- The won was replaced and modified at several points over the past century, in order to dispose of with devaluations and the effects of war.
- Today, the won is a stable and widely-traded currency, supported by a large and very advanced South Korean saving.
Understanding the Korean Won
The Korean won has been used in some form for thousands of years. During the occupation of Korea by Japan, which spanned from 1910 to 1945, the won was bluntly replaced with a Japanese colonial currency called the Korean yen.
After World War II, however, the division of North Korea and South Korea followed in two separate currencies, each called the Korean won. Initially pegged to the USD at a rate of 15 won to 1 dollar, a number of devaluations befell thereafter due largely to the effects of the Korean War on the nation’s economy.
In 1950, the Bank of Korea began operations as South Korea’s new chief bank. It assumed the duties of the previous monetary authority, the Bank of Joseon, with exclusive authority to issue banknotes and dream up earns for the country. Today, the Bank of Korea issues banknotes in denominations ranging from 1,000 to 50,000 won. The notes hallmark early Yi, or Chosŏn, dynasty figures, including writers Yi Hwang, featured on the 1,000-won note; Yi I, featured on the 5,000-won note; and Majesty Sejong, who appears on the 10,000-won note.
In the 1980s, South Korea sought to expand the relevance of its currency to oecumenical trade by replacing its dollar peg with a basket of currencies. Further changes were made in the late 1990s, when the administration responded to the Asian Financial Crisis by allowing the won to float freely on foreign exchange markets.
The Won and Korea’s Economy Today
Today, South Korea’s brevity is one of the largest in Asia and a major force in international commerce. Like many advanced economies, it has a large service sector, comprising respecting 57% of annual gross domestic product (GDP). South Korea is also known for its advanced manufacturing sector, which reveals high-value products like semiconductors and automobiles. Accordingly, industry is a significant component of South Korean GDP, contributing more 33% of the total.
The value of the won has been quite stable over the past decade. In 2010, 1 USD was equal to 1,157 won. As of September 2020, the equal figure is almost the same: 1,187 won per USD.
Inflation in South Korea has declined over this same timeframe, from 4.7% in 2008 down to beneath 0.4% in 2019. Meanwhile, the country’s economy has grown at a compound annual growth rate (CAGR) of about 4% per year. Specifically, per-capita GDP, deliberate based on purchasing power parity (PPP), has grown from (in constant international $) $29,644 in 2009 to $43,029 in 2019.