What is happening with the Korean Won?

No need to be alarmed. The Won is a currency that fluctuates from time to time and these are tough times everywhere. The one amazing thing about Korea and Koreans is that they are a highly developed country (for the most part), with a highly developed economy and industry. The Korean Won will rebound. (Bloomberg-Korean Won May Gain..)

Take the IMF crisis back in mid 1997 as an example. The Won was critically devalued to 1800Won to 1USD from 800Won to 1USD, people were losing jobs, major companies were crashing down. It was absolute mahem. The Koreans rallied.

The Koreans secured loans from the IMF, cleaned up in-house issues and by half way through 1998 the Won had recovered to around 1300 Won.

10 Years of Korean Won Exchange Rates

Korean Won Exchange Rates for past 10 years - CAD,AUD,USD,GBP

Korean Won Exchange Rates for the past 10 years in USD, CAD, GBP and AUD

source: Bank of Canada Exchange Rates

As you can see from this graph, the Won has remained very constant over the past 10 years since the IMF bailout. The recent decrease in the value of the Won can be attributed to the global economic slowdown, decreased export sales results in a weakened economy for Korea but all is not lost. Sales may not dip when one considers a weaker Won and a stronger American dollar... I am a teacher, not a currency trader so I can't comment with absolute conviction but I can say, I have been involved in Korea since 1995 and I am very confident in the Won recovering very quickly. My personal opinion is that the Won will strengthen past it's original position at the beginning of this fiscal year.

On an aside note, when North Korea finally crumbles and the two Koreas are reunited, we will see another major dip in the value of the Won but this will be a very shortlived devaluation. The merging of the two Koreas will mean direct market access by land to the rest of Asia and Europe. It will also mean direct access to untapped and untouched resources. Again, I am merely a teacher... but I really don't think this is that far away...