The value of the won is gradually recovering.

The real value of the South Korean won is in the process of recovering after seven months of continuous depreciation.

The South Korean won. Photo: AFP/VNA

According to data released on February 24 by the Bank of Korea (BoK) and the Bank for International Settlements (BIS), South Korea's real exchange rate index (REER) reached 86.86 in January 2026.

Statistics show that the REER index has declined continuously for six months, from 92.48 in June 2025 to 86.36 in December 2025, marking the lowest level in 16 years since the 85.47 level of April 2009 during the global financial crisis.

South Korea's REER index has historically hit lows of 68.1 during the Asian financial crisis and 78.7 during the global financial crisis. More recently, the index has fluctuated above 100 from October 2020 to July 2021 and continues to hover around 90.

The US dollar continued to strengthen amid robust US economic growth, while the Japanese yen and the Chinese yuan weakened simultaneously, leading to a depreciation of the won. Consequently, the REER index fell below 95 in the second half of 2024, then plummeted to 90 in December following the martial law crisis in South Korea, and remained at a similar level until September 2025.

The real exchange rate (REER) is the rate that shows the purchasing power of a country's currency against a foreign currency. It is a method of valuing the exchange rate relative to the base year. A value above 100 is considered overvalued compared to the base year, while a value below 100 is considered undervalued. This indicates the purchasing power of the South Korean won in international trade and therefore its real value is significantly lower than that of other countries.

The won/USD exchange rate, which had been under strong upward pressure due to the weakening yen, has recently shown signs of recovery, and the won/USD exchange rate had at one point fallen to 1,430 won/1 USD.

In his remarks at the National Assembly 's Economic and Financial Planning Committee plenary session, Bank of Korea Governor Lee Chang-yong emphasized that the exchange rate had improved; however, he argued that the exchange rate of 1,480 won/1 USD at the end of 2025 was too high and did not accurately reflect the strength of the South Korean economy.

According to the Bank of Korea (BoK), the exchange rate will undergo significant changes in 2026 due to supply and demand factors. However, the exchange rate is expected to be complexly influenced by factors such as future foreign exchange supply and demand conditions, the direction of US monetary policy and the volatility of the USD and yen, domestic and international risk factors, investment flows, and policy management tools of various countries.

Source: https://baotintuc.vn/thi-truong-tien-te/gia-tri-dong-won-dang-dan-phuc-hoi-20260224083201095.htm