Korean currency. History of monetary units in Korea

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

In South Korea, the local won is used as the currency. The Korean currency in the international classification has the designation KRW and consists of ten hwans. It should be noted that at the moment, units with a face value of less than one won do not participate in the money circulation. Among the current bills, we can see banknotes in denominations of 50,000, 10,000, 5,000 and 1,000 won. In addition, 500, 100, 50, 10, 5 and 1 won coins are used.

The appearance of the South Korean won

The history of the Korean currency dates back to the 3rd century BC. Then banknotes were products in the form of knives. In addition, coins were used as payment instruments, which were in the form of grains. In this form, Korean banknotes went until the 11th century AD. After that, a transition was made to the production of steel coins. In the next two centuries, silver and copper were also used to make currency, although their number was limited.

In the 4th century, the Chosen dynasty replaced the Koryo family. This happened in 1392. During her reign, a number of attempts were made to reform the monetaryKorea devices. In the 17th century, 24 mints were opened on the territory of the state, the function of which was to make coins from copper and bronze. The official currency in Korea appears in 1633. Moon becomes it. At the end of the 19th century, its place was taken by the yang, which became the first Korean currency related to the decimal monetary system. So, one yang consisted of 100 poons.

In 1902, a denomination was carried out in Korea, as a result of which the won became the official Korean currency. She was equal to five yangs. In 1909, the Bank of Korea was opened, which is responsible for issuing the won. Unfortunately, Korea was unable to defend its independence, and in 1910 the country's territory was annexed to Japan. The won was withdrawn from circulation and replaced by the Korean yen at a ratio of 1 to 1.

Money in Korea after World War II

After the surrender of Japan in World War II, the hwan became the official currency in Korea. The exchange rate of the American dollar was then 15 hwan for one dollar. In 1948, as a result of the conflict on the Korean Peninsula, the country was divided into two different states - South and North Korea. The first was in the zone of influence of the United States, and the second - the USSR and China.

It should be noted that even before the division of Korea, the hwan collapsed several times. So, in 1947, the Korean currency was 50 hwan per US dollar. A year later, it depreciated another 10 times. One dollar was already worth 450 Korean hwan. In 1949there was another round of devaluation - 900 hvan per US dollar. In 1950 - 1800 for 1 dollar. And in 1951, the US currency was already valued at 6,000 hwan.

Return of won into circulation

In 1962, the monetary system was reorganized in South Korea. An updated won was returned to circulation, which changed to hwan at a ratio of 1 to 10. Immediately after the end of the monetary reform, one American dollar cost 125 won. Until 1980, the Bank of Korea set the official value of the Korean currency. At the same time, the won has not escaped a series of devaluations. So, in the spring of 1964, the US dollar exchange rate was 255 won for one 1 dollar. In 1972, one US dollar was already worth 400 won. And in the already mentioned 1980 - 500 local monetary units.

It should be noted that back in 1997, the leadership of South Korea agreed with the IMF to turn the won into a freely convertible currency. From that moment on, the value of South Korean money is determined solely by the ratio of supply and demand. It should also be emphasized that the latest depreciation led to a two-fold reduction in the value of the won. The reason for this was the Asian financial crisis in the late 90s of the last century.

South Korean currency on the Forex market. What is the exchange rate of the won against the ruble?

It would be appropriate to say that the South Korean won is one of the most popular instruments of the Forex currency market and, moreover, is an interesting object for investors, not without reason. The Korean currency against the ruble is traded inratio 1 RUB=19, 13 KRW.

The key to the won's success on the foreign exchange markets has been the rapid development of the South Korean economy over the past three decades. Local production shows constant growth, and at the same time, thanks to the developed high-tech industry, it is export-oriented.