The Korean won depreciated by 1.6% against the US dollar in August, making a cumulative 8% year-to-date depreciation. A positive is that the pace of vaccination has been accelerating lately, which is set to boost KRW in the medium-term, according to strategists at MUFG Bank.
Progress in vaccination will boost KRW in medium-term
“Progress in vaccination will eventually help to calm the market and reduce risk aversion, thereby increasing investors’ appetite for risky assets and boosting the KRW.”
“We see a stronger KRW against USD to 1,130.0 by the middle of 2022.”