Foreign Exchange Guide to South Korea
In this guide we review :
- South Korean won info - general info about the South Korean won
- South Korean won in the markets - recent KRW moves and predictions from the FX markets
- Travelling in South Korea - currency & money saving tips
- Buying South Korean won cash online - travel money for South Korea
- Sending money to South Korea - save on South Korean won bank transfers to South Korea
- South Korean won exchange rates - latest info & charts.
South Korean won (KRW) general currency information
The won replaced the South Korean hwan at an exchange rate of 1 hwan to 100 won in 1953 following the Korean war. The won is subdivided into 100 jeon.
A single unit of won is worth little in comparison with the currencies of other advanced economies. Between 1990 and 2017, to buy a single US dollar always required at least ₩900. At points of major won weakness – December 1997 and March 2009 – buying a single US dollar required ₩1900 won and ₩1600 respectively.
Given the almost worthless value of won and jeon coins, in 2017 the South Korean government began a trial with selected stores intended to move the country towards being a coinless society. These stores no longer return coins to customers but instead deposit the coins’ value onto prepaid cards, such as those used by South Koreans on public buses and trains.
Despite the South Korean economy being larger than that of Australia and far larger than those of Switzerland and New Zealand, as well as being advanced, the won is considered a far riskier currency to hold than any of the FX ‘majors’ – a group which includes the Australian dollar, New Zealand dollar and Swiss franc. This is in large part due to the ever-present strain between North and South Korea, which frequently threatens to spill over into a military conflict. For this reason, the won’s value typically falls against these majors (especially the Japanese yen, Swiss franc, US dollar, euro and British pound) during periods of economic uncertainty or when global geopolitical risk is elevated, or during bouts of high market volatility.
South Korean won (KRW) in the markets
The won was Asia’s best performing currency of 2017, having gained 13.2% against the dollar. Explosive first and fourth quarters more than made up for a lack of movement throughout the middle of the year, during which the won was tossed around by changes in risk sentiment relating to North Korea.
After kicking-off 2018 with another good week, the won appreciated to its strongest level against the dollar in three years, with USD/KRW falling to 1061.
Against the yen, the won gained 9% in 2017 (KRW/JPY 0.1064 in early January) but against a very strong euro, it did little (EUR/KRW 1276.3).
The won has been helped recently by a more hawkish outlook for South Korea interest rates. In part due to caution over its northern neighbour, South Korea’s central bank had been forced to leave interest rates at record lows of 1.25%, which limited the won’s potential, but finally, in November, the Bank of Korea hiked rates for the first time since 2011, to 1.5%. In December, the central bank appeared to signal further hikes on the horizon when it said that a 1% increase in Korean rates would not cause debt repayment problems for households or companies. Higher interest rates, or the expectations of such, will continue to support the won going forward.
South Korea currency and money saving tips
South Korea is known to be a wonderful destination, the locals are welcoming, the countryside serene, and the cities high paced. The country side ranges from spectacular mountains to tranquil villages. There is even the possibility to sail to remote islands. The countries capital is Seoul, a stunning round-the-clock city filled to the brim, where the ancient palaces and modern marvels stand side by side. There are plenty of taxi's and subway stations so getting around this energetic city is not a problem.
For getting around locally South Korea has very good public transport so feel free to grab a map and have a look around with the locals.
For longer trips there are about a dozen different local airlines offering flights, the busiest air route being between Jeju Island and Seoul-Gimpo airport, so much so that there seems to be a flight every 10 minutes. The cheapest flights were offered by Jeju Air, Air Busan (a subsidiary of Asiana) , Eastar Jet and Jin Air.
To book with all these airlines, you need to look on their own website to find their timetable, and then try and make a booking. These are all low cost, no frills airlines and they have a very low hand baggage allowance and you need to pay for any hold luggage you may have. The fast trains are the KTX system. The KTX service is a premium service so this is bound to be pricier than taking the slower train options.
While there are ATM's everywhere in big cities like Seoul, they can be sometimes hard to find in the villages, so if you plan to stray a little off the beated path, be prepared to take plenty of local currency with you. Even in Seoul not all ATM's will work with foreign cards, be sure to check that it is specially marked for Global Cards.
South Korea Trip Checklist
Travel money for South Korea
Save money and time by Ordering your South Korean won online from Travelex, you get better rates and can pick up the KRW cash locally or even on travel day at the airport.
Another popular option is to use a Pre-paid Travel Card. Your Debit/Credit Card provider will charge you 2% from market mid-rate, but your bank may also charge an extra 3% as an “Overseas Transaction Charge” plus “Overseas ATM” fees for withdrawing cash.
For card purchases if offered a choice of currencies always select to Pay in South Korean won otherwise you may get much worst exchange rates.
Sending money to South Korea
When sending money to South Korea it’s important to compare your bank’s rates & fees with those we have negotiated with our partner money transfer providers. To get a better deal you should follow these 3 simple steps :
- Open an account with a BER reviewed FX provider (id docs may be required)
- You specify the local or South Korean won amount you want to transfer
- Make a local currency domestic transfer for the requested amount to the provider's bank account in your country
- Once your funds are received by the provider the converted KRW amount will be transfered to the recipient account you specify in South Korea.
By comparing the rates of FX specialist providers rates versus your bank's standard rates you can hopefully save around 5% and maybe more - end result is more South Korean won deposited into the recipient bank account in South Korea and less margins and fees kept by the banks!