A considerable amount of money flows between the United States and South Korea each year. In 2016, more than U.S. $2.86 billion made its way from the U.S. to South Korea as remittances. In the same year, around U.S. $148 million was sent from South Korea to the U.S. Bilateral trade of goods and services between both countries crossed the U.S. $156 billion mark in 2017.
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The United States adopted the dollar as its official currency in 1792. Now, the dollar is also used as a sole currency in Ecuador, El Salvador, the Federated States of Micronesia, two British Overseas Territories, the British Virgin Islands, Turks and Caicos Islands, as well as the Caribbean. Some of the places where it is used unofficially include Belize, Liberia, Cambodia, Myanmar, Zimbabwe, Panama, and Haiti.
The U.S. dollar accounts for the largest share in the basket of global reserve currencies, which stood at 62.70% in 2017. It is also the world’s most traded currency, accounting for more than 87% of the global forex market turnover in April 2016. Estimates suggest that over U.S. $5 trillion pass through the global forex market every day.
|Nicknames||Buck, moolah, paper, dough, dead presidents, |
bones, greenback, green
|Bank notes||$1, $2, $5, $10, $20, $50, $100|
|Coins||1c, 5c, 10c, 25c, 50c, $1|
Use of the won in Korea dates back to a few centuries, and it was the country’s official currency until 1910. Under Japanese rule from 1910 to 1945, the won was replaced by the Japanese yen at par. At the end of the Second World War, the division of Korea resulted in the introduction of two currencies. Both, the North Korean won and the South Korean won, replaced the yen at par.
The hwan replaced the South Korean won in February 1953 and was reintroduced in June 1962. It became the only acceptable legal tender in March 1975.
One won is divided into 100 jeon, although the subunit is no longer used in transactions, but only in forex rates. The won is a completely convertible currency, and is routinely traded with major currencies such as the U.S. dollar, the Australian dollar, the euro, and the Japanese yen.
In April 2016, the South Korean won was the 15th most commonly traded currency in the world, accounting for 1.7% of the global forex market turnover.
|Bank notes||KRW 1,000, KRW 2,000, KRW 5,000, |
KRW 10,000, KRW 50,000
|Coins||KRW 1, KRW 5, KRW 10, KRW 50, KRW 100 |
U.S. Dollar / South Korean Won Historical Rates
The won was originally pegged to the U.S. dollar at the rate of ₩15 to the dollar. The hwan replaced the won in 1953, at the rate of 100 won = 1 hwan. The country reintroduced the won in June 1962, at the rate of 10 hwan = 1 won. When reintroduced in 1962, the won was pegged to the U.S. dollar at the rate of ₩125 to the dollar. This peg stayed in place until 1980, and it changed several times after, until 1997. In January 1997, the won traded at ₩865 to the dollar. The won then became a free floating currency.
The won has displayed relative stability against the U.S. dollar since the turn of the last century, fluctuating between ₩1,000 to ₩1,250 to the dollar, although it briefly breached the ₩1,500 mark in February 2009.
USD/KRW in the last five years
|U.S. $1 =|
|1 July, 2013||KRW 1,123.70|
|1 July, 2014||KRW 1,028.00|
|1 July, 2015||KRW 1,115.70|
|1 July, 2016||KRW 1,112.24|
|1 July, 2017||KRW 1,119.40|
USD/KRW in the last five months
|U.S. $1 =|
|1 March, 2018||KRW 1,061.26|
|1 April, 2018||KRW 1,070.45|
|1 May, 2018||KRW 1,080.59|
|1 June, 2018||KRW 1,115.04|
|1 July, 2018||KRW 1,115.75|
What Affects USD/KRW Rates?
The Monetary Policy Board that is part of the Bank of Korea is responsible for setting the nation’s monetary policy track that governs the base interest rate. Inflation targeting is integral to the bank’s monetary policy framework. The board aims to obtain mid-term price stability by accounting for factors such as the country’s economy, price movements in the domestic market, as well as conditions in the forex market.
Policies set by the U.S. Federal Reserve may have an effect on the USD/KRW currency pair. When China tweaks the value of the yuan, there appears to be a cascading effect on the USD/KRW exchange rate. Economic uncertainty, foreign trade, and interest rates prevailing in both countries may also affect the USD/KRW pair.
Transferring money from the U.S. to South Korea or the other way around requires that you pay close attention to the prevailing USD/KRW exchange rate. Most banks are known to add significant markups, so you might be better off comparing the top overseas money transfer companies instead.