The won-yuan exchange rate surged past 202 for the first time since the launch of the direct trading market between the South Korean won and Chinese yuan in 2014, setting a new record on Mar. 24. The sharp rise has drawn attention, as it comes amid mounting pressure on the yuan from tensions with the United States and a sluggish property sector—yet the won is depreciating at an even faster pace.
According to Seoul Money Brokerage on Mar. 25, the won-yuan rate closed at 202.41 on Mar. 24, up 0.71 won from the previous session. This marks the highest level since the direct won-yuan trading market opened in December 2014. The previous record was set on Oct. 6, 2022, when the rate hit 201.52 in the wake of turmoil in South Korea’s corporate bond market following the Legoland default crisis in Gangwon-do.
The exchange rate has been on a steady upward trajectory since Dec. 27, 2024, when it breached the 200-won mark at 200.19. Although it briefly dipped below 200 in February, it spiked again ahead of the Constitutional Court’s ruling on President Yoon Suk-yeol’s impeachment trial, exhibiting heightened volatility. In March, the rate has held above 200 for all but four trading days—Mar. 4, 7, 10, and 19—underscoring a sustained high-rate trend.
What makes this development particularly notable is that the yuan itself has been trading at historically low levels. China’s retail sales growth—a key gauge of domestic demand—slowed to 3.5% last year, less than half the 7.2% posted a year earlier, further weighing on the yuan. The currency weakened further after U.S. President Donald Trump, in January, announced a 20% tariff hike on Chinese imports.
On Jan. 7, the dollar-yuan exchange rate rose above 7.33, ahead of Trump’s inauguration, marking its highest level since September 2023. This was only the third time the rate has topped 7.30 since China adopted a managed floating exchange rate system in July 2008. The previous instances occurred in October 2022, amid aggressive U.S. Federal Reserve rate hikes, and in September 2023, during a sharp downturn in China’s property sector. Although the rate has since eased to around 7.25, it remains above the 7.17 level seen in early November 2024, before Trump’s election victory.
Park Sang-hyun, a researcher at iM Securities, said the yuan is under pressure due to concerns over China’s economic fundamentals and a broadly stronger U.S. dollar. “However, the won is weakening even more rapidly, which is amplifying volatility,” he said.
