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The exchange rate between the South Korean Won (KRW) and the Swedish Krona (SEK) has experienced notable fluctuations over the past few months. This report analyzes the recent trends, underlying factors influencing these movements, and potential implications for stakeholders.

Recent Exchange Rate Trends

Over the six-month period from September 2024 to March 2025, the KRW/SEK exchange rate exhibited a downward trend. The highest rate recorded was 0.007899 SEK per KRW on November 21, 2024, while the lowest was 0.007163 SEK per KRW on March 4, 2025. The average exchange rate during this period was approximately 0.007649 SEK per KRW. This represents a depreciation of about 6.96% in the value of the Korean Won relative to the Swedish Krona over these six months. (exchange-rates.org)

Factors Influencing the Exchange Rate Movements

Several factors have contributed to the observed fluctuations in the KRW/SEK exchange rate:

1. Interest Rate Differentials: Central banks' monetary policies significantly impact currency values. If the Bank of Korea (BoK) maintains lower interest rates compared to the Riksbank (Sweden's central bank), it could lead to capital outflows from South Korea to Sweden, thereby depreciating the KRW against the SEK.

2. Economic Performance: Disparities in economic growth rates between South Korea and Sweden can influence investor confidence and currency demand. For instance, if Sweden's economy outperforms South Korea's, the SEK may strengthen relative to the KRW.

3. Trade Balances: The trade dynamics between the two countries also play a role. A trade surplus in Sweden or a deficit in South Korea can lead to increased demand for SEK, appreciating its value against the KRW.

4. Global Economic Conditions: External factors such as global economic slowdowns, geopolitical tensions, or changes in commodity prices can affect both currencies. For example, a decline in global demand for South Korean exports can weaken the KRW.

Historical Context and Long-Term Trends

Historically, both the Swedish Krona and the Norwegian Krone have exhibited periods of weakness. An analysis by SEB's economist Johan Javeus highlighted that despite the different economic structures of Sweden and Norway, their currencies have maintained a close relationship over the past 150 years. This suggests that factors such as the small size of these currencies and their exposure to global market sentiments contribute to their volatility. (ft.com)

Implications for Stakeholders

The depreciation of the KRW against the SEK has several implications:

• Exporters and Importers: South Korean exporters to Sweden may find their goods more competitively priced, potentially boosting sales. Conversely, Swedish exporters to South Korea might face higher costs, potentially reducing demand for their products.

• Investors: Currency fluctuations can impact returns on investments denominated in foreign currencies. Investors need to consider exchange rate risks when allocating assets between South Korea and Sweden.

• Tourists: For travelers, a weaker KRW means higher costs when visiting Sweden, while Swedish tourists may find South Korea more affordable.

Conclusion

The KRW/SEK exchange rate has been influenced by a complex interplay of interest rate differentials, economic performance, trade balances, and global economic conditions. Understanding these factors is crucial for businesses, investors, and policymakers to navigate the challenges and opportunities presented by currency fluctuations. Continuous monitoring and analysis are essential to make informed decisions in this dynamic environment.