SEOUL, KOREA - Hyundai Economic Research Institute said in a new report "The Impact of Won's Appreciation on Manufacturing Profitability" published on December 1 that a 10-percent increase in won value will cut manufacturing sales revenue by 3.4 percent." By industry sector, the impact differs, including transportation equipment by 5.2 percent, electric and electronic devices 5.0 percent, precision machinery 4.2 percent, general machinery 3.6 percent, and oil and coal 3.5 percent.

 

If won value rises, import prices will fall, benefiting industrial sectors relying more on imports than exports such as oil and coal (whose import prices will decline by 7.0%), electric and electronic devices (2.7%), chemical (2.5%).

 

For 22 months between January 2012 and October this year, the won has appreciated 7.4 percent, becoming one of the few currencies that saw highest appreciation. The principal author of the report said, "The government must make sure to reduce the impact of the rising won value by fine-tuning the exchange rate, keeping the won-yen exchange rate in check, and using FTAs to minimize the negative impact of currency rate change."