USD to KRW Exchange Rate History — 10 Year Analysis

The US Dollar to South Korean Won exchange rate is one of the most closely watched currency pairs in East Asia. Over the past decade, USD/KRW has swung from a post-crisis low near 1,060 to a multi-decade high above 1,480, driven by Federal Reserve policy cycles, geopolitical shocks, South Korea's trade balance, and structural capital outflows. Whether you are sending money abroad, managing FX exposure in a Korean business, or simply trying to understand why your dollar buys more Won than it did five years ago, this 10-year breakdown gives you the full picture.

Use the Currency Converter to check today's live USD/KRW rate before reading on.

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Key Takeaway

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Between 2016 and 2026, the USD/KRW rate climbed roughly 30%, from an annual average near 1,160 to levels above 1,450. The primary drivers were the Fed's aggressive 2022–2023 rate hike cycle, South Korea's temporary trade deficit in 2022, and growing structural outflows from Korean institutional investors into US assets. The Won briefly traded near 1,480 in late 2024 and again in early 2026. Most major investment banks forecast a gradual drift back toward 1,380–1,440 over the course of 2026 as the US dollar weakens moderately against global peers.

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What Does a Decade of USD/KRW Data Actually Look Like?

The table below shows approximate annual average exchange rates from 2016 through 2025, followed by the early 2026 trading range.

Several distinct phases emerge from this data, each with its own macro driver.

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Phase 1: The Strong Won Era (2016–2018)

The first three years of our analysis represent the most favorable period for the Korean Won in over a decade. From a 2016 average of 1,161 KRW per dollar, the rate fell steadily to a multi-year low average of 1,102 in 2018 — meaning each dollar bought fewer Won, reflecting a stronger Won.

Two forces drove this appreciation. First, South Korea's technology sector was in the middle of an extraordinary export supercycle. Global demand for DRAM memory chips and OLED displays, both dominated by Samsung and SK Hynix, generated massive dollar inflows into South Korea. When exporters convert those dollars into Won to pay domestic wages and taxes, the Won naturally strengthens.

Second, the Federal Reserve was raising rates only gradually during this period — a total of 225 basis points between December 2015 and December 2018 — meaning the rate differential between US Treasuries and Korean government bonds remained modest. Capital did not rush out of Korea in search of higher US yields.

The one geopolitical wildcard was the deployment of the US THAAD missile defense system in 2016–2017, which triggered a Chinese consumer boycott of Korean goods. This created brief Won volatility but did not reverse the overall appreciation trend, as the semiconductor cycle proved far more powerful.

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Phase 2: Trade War and Pandemic Turbulence (2019–2020)

The US–China trade war fundamentally changed the risk calculus for emerging market currencies. South Korea, deeply embedded in global supply chains connecting China to the US, found itself caught in the crossfire. The Won weakened from its 2018 average of 1,102 back to 1,165 in 2019 as global trade volumes slowed and investors moved toward safe-haven assets.

Then came COVID-19. The initial market shock in February–March 2020 sent the Won as weak as 1,280 intraday as global investors fled to dollar liquidity. The Bank of Korea (BOK) cut its benchmark rate from 1.25% to a record low of 0.5% in May 2020 to cushion the blow. By year-end, the annual average settled at 1,184, but the seeds of a longer period of won weakness had been planted through the BOK's ultra-loose monetary stance.

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Phase 3: Recovery, Then the Fed's Wrecking Ball (2021–2022)

The year 2021 offered a temporary reprieve. South Korea's strong vaccination program, surging chip exports, and recovering global trade helped the Won recover to an annual average of 1,145 — nearly back to 2018 levels. The BOK began raising rates in August 2021, becoming one of the first major central banks to start tightening — a move that initially supported the Won.

But 2022 was a different story entirely. The US Federal Reserve launched one of the most aggressive tightening cycles in its modern history, raising the federal funds rate by 425 basis points across the year, from near zero to 4.25–4.50%. This created a rapidly widening interest rate gap between US and Korean assets, triggering capital outflows from Korea and pushing USD/KRW from around 1,190 in January to as high as 1,445 by September — levels last seen during the 2009 global financial crisis.

Compounding the currency pressure was South Korea's trade balance. For the first time since 2008, the country recorded an annual trade deficit in 2022, as surging global energy prices dramatically inflated the country's import bill for crude oil and liquefied natural gas. When a current account surplus disappears, one of the structural anchors supporting the Won evaporates with it.

The BOK raised its own policy rate to 3.50% by January 2023, but this remained below the Fed's terminal rate, preserving a negative interest rate differential that kept pressure on the Won. The USD/KRW annual average for 2022 settled at approximately 1,292.

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Phase 4: Stabilization and Renewed Pressure (2023–2025)

As the Fed paused its hike cycle in mid-2023, the Won found a temporary floor. South Korea's trade balance recovered sharply — swinging back to a surplus of roughly USD 51.8 billion in 2024, the highest since 2018 — driven by record semiconductor exports as the AI buildout created insatiable global demand for high-bandwidth memory chips.

Despite the improved trade fundamentals, the Won struggled to reclaim its pre-pandemic levels. The USD/KRW annual average drifted from 1,305 in 2023 to 1,363 in 2024, and then to approximately 1,421 across 2025.

Two structural factors explained much of this persistent weakness. First, South Korea's National Pension Service (NPS) and other institutional investors were steadily increasing their allocations to overseas assets, primarily US equities and bonds, without currency hedging. This created a consistent source of dollar demand — essentially a structural outflow unrelated to trade or speculative flows. Second, South Korea's political turbulence in late 2024, including the brief declaration of martial law by President Yoon Suk-yeol in December, rattled foreign investor confidence and sent USD/KRW briefly above 1,480.

The BOK, watching the Won near multi-decade lows, kept its benchmark rate on hold at 2.50% through late 2025 despite the economy needing stimulus, explicitly citing FX stability as a constraint on further easing.

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What Drives the USD/KRW Rate? The Four Key Factors

Understanding the forces behind the exchange rate is more useful than memorizing historical data points. Four variables do most of the work.

1. Federal Reserve Interest Rate Policy

The Fed's rate decisions are the single most powerful external driver of the Won. When the Fed raises rates faster than the BOK, US assets offer higher yields, drawing capital away from Korea and weakening the Won. When the Fed cuts rates or signals a pause, the rate differential narrows, supporting the Won. The 2022 episode — where 425 bps of Fed hikes pushed USD/KRW from ~1,190 to ~1,445 — is the clearest illustration of this dynamic in recent memory.

2. Bank of Korea (BOK) Policy Rate

The BOK's own benchmark rate matters through its interaction with the Fed rate, not in isolation. A larger positive spread between US rates and Korean rates is bearish for the Won. The BOK cut aggressively in 2020, then tightened to 3.50% by early 2023, then began cutting again to 2.50% by mid-2025 as growth disappointed. Each easing move revived pressure on the Won at the margin.

3. South Korea's Trade and Current Account Balance

South Korea runs a structurally export-oriented economy. A healthy current account surplus — generated by semiconductor, auto, and petrochemical exports — creates a steady supply of dollars being converted into Won, which supports the currency. The 2022 trade deficit was a key reason the Won hit multi-year lows that year. The subsequent recovery in the surplus helped stabilize the rate, even if it did not fully reverse the weakness caused by rate differentials.

4. Global Risk Appetite and Dollar Index (DXY)

The Won, like most emerging market currencies, tends to weaken when global risk appetite deteriorates and investors move into dollar-denominated safe assets. Conversely, a broad dollar weakening cycle — such as occurred in 2017 and parts of 2020–2021 — provides a favorable tailwind for the Won regardless of Korea-specific fundamentals. Monitoring the DXY (US Dollar Index) alongside USD/KRW provides crucial context.

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2026 Outlook: What Are Forecasters Expecting?

As of early 2026, with USD/KRW trading in the 1,455–1,510 range, the consensus view among major investment banks is cautiously optimistic for the Won over the medium term.

Bank of America maintains that USD/KRW will trend lower throughout 2026, supported by a forecast of a broadly weaker US dollar as the Fed continues its gradual easing cycle. ING's Asia FX outlook for 2026 identifies the Won as one of the region's more compelling recovery candidates, citing the narrowing US–Korea rate differential and continued strength in semiconductor exports tied to AI infrastructure spending.

The average three-month forecast from major investment banks stands near 1,440 per dollar, with year-end estimates ranging from approximately 1,395 to 1,475. The wide range reflects genuine uncertainty about whether structural institutional outflows from Korea will be enough to offset the improving rate differential.

Key risks to a Won recovery include a return of US inflationary pressures that forces the Fed to pause or reverse its easing, a meaningful slowdown in global semiconductor demand, or further geopolitical uncertainty on the Korean peninsula.

For ongoing tracking of USD/KRW, bookmark the Currency Converter for real-time rates.

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Frequently Asked Questions

What was the USD/KRW exchange rate 10 years ago?

In 2016, the annual average USD/KRW exchange rate was approximately 1,161. This means one US dollar bought around 1,161 Korean Won. Today's rates near 1,450–1,510 represent roughly a 25–30% depreciation of the Won over that decade, largely attributable to the Fed's 2022–2023 rate hike cycle and structural capital outflows from Korea.

When was the Korean Won at its weakest against the dollar in the past decade?

The Won hit its weakest intraday levels in October 2022, briefly touching around 1,445 KRW per dollar — a level not seen since the 2009 global financial crisis. In 2024–2025, it again traded close to those extremes, reaching above 1,480 in late 2024 following South Korea's brief political crisis.

Why did the Korean Won weaken so much in 2022?

Three forces converged in 2022: the Federal Reserve raised rates by 425 basis points — the fastest pace in decades — widening the interest rate gap between US and Korean assets and triggering capital outflows from Korea. Simultaneously, South Korea posted its first annual trade deficit since 2008, as soaring global energy prices inflated its import bill. Both the financial and the real economy channels pointed in the same direction: a weaker Won.

Does the Bank of Korea intervene in the foreign exchange market?

Yes. The BOK periodically intervenes in the spot forex market — typically selling US dollars to slow or moderate Won depreciation when it becomes disorderly. The Korean government has also engaged in "smoothing operations" through the Korea Exchange Bank. However, sustained intervention against powerful macro forces like a Fed tightening cycle has historically proven limited in its long-term effect. South Korea is on the US Treasury's currency monitoring list as a result of its intervention activity.

How does South Korea's trade balance affect the Won?

South Korea's export revenues are predominantly priced in US dollars. When exports exceed imports — generating a trade surplus — exporters convert large amounts of dollars into Won, creating natural demand for the currency and supporting its value. When this surplus shrinks or turns to a deficit (as in 2022), that source of support disappears. The recovery of a USD 51.8 billion trade surplus in 2024, driven by AI-related semiconductor demand, was a key factor preventing the Won from weakening even further.

What is the USD/KRW forecast for the end of 2026?

As of Q1 2026, major investment bank forecasts for year-end USD/KRW range from approximately 1,395 to 1,475, with an average near 1,440. The base case is for a modest Won recovery as the US dollar weakens gradually alongside Fed rate cuts. However, structural headwinds — including Korean institutional investors' unhedged overseas investments and lingering political uncertainty — may limit the extent of any appreciation. Always check live rates via our Currency Converter before making any financial decisions.

Is USD/KRW a good indicator of South Korea's economic health?

It is one useful indicator among many. A gradually weakening Won can actually boost Korean export competitiveness in the short term — making Samsung phones or Hyundai cars slightly cheaper in dollar terms for foreign buyers. However, a rapidly weakening Won raises inflation through higher import costs (especially for energy) and can trigger capital outflows that raise borrowing costs across the Korean economy. The BOK's repeated decisions in 2024–2025 to hold rates higher than economic growth alone would justify — precisely to limit FX weakness — illustrate how a weak currency creates painful policy trade-offs.

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For live exchange rate data and conversions, use the Currency Converter. Rates in this article reflect historical annual averages and early 2026 spot data; they are for informational purposes only and should not be relied upon for financial transactions.