Despite the ongoing contraction of South Korean industrial production, other Asian currencies rose slightly on Friday, with the South Korean won up by 0.2% and the Malaysian ringgit adding 0.3%. The won, in particular, advanced even as data showed that South Korean industrial production continued to shrink through February. This development is surprising given that industrial production is considered a leading indicator of a country’s economic health, with a contraction in the sector potentially leading to a weaker currency.
South Korea’s Industrial Production Contraction
According to data from the Bank of Korea, South Korean industrial production shrank by 0.8% in February compared to the previous month. This contraction is attributed to weak demand for semiconductors, the country’s leading export. In addition, the ongoing global chip shortage has led to production cuts by major chipmakers, including Samsung Electronics and SK Hynix. However, despite the contraction, the country’s industrial production remains higher than pre-pandemic levels.
South Korean Won Rises Despite Industrial Production Contraction
Despite the contraction in South Korean industrial production, the South Korean won rose by 0.2% on Friday. This rise is attributed to various factors, including the country’s strong economic fundamentals, including high levels of foreign exchange reserves, a current account surplus, and a stable political environment. In addition, the country’s successful management of the COVID-19 pandemic has helped boost investor confidence.
Malaysian Ringgit Also Rises
In addition to the South Korean won, the Malaysian ringgit also rose slightly on Friday, adding 0.3%. The rise is attributed to various factors, including higher oil prices, which is a major export for the country. In addition, the country’s successful vaccination campaign has helped boost investor confidence.
Conclusion
In conclusion, despite the ongoing contraction of South Korean industrial production, the country’s currency, the won, rose by 0.2% on Friday. This rise is attributed to various factors, including the country’s strong economic fundamentals, successful management of the COVID-19 pandemic, and a stable political environment. In addition, the Malaysian ringgit also rose slightly on Friday, adding 0.3%, attributed to higher oil prices and a successful vaccination campaign. However, it remains to be seen whether these currencies will continue to rise in the coming days and weeks, given the ongoing challenges posed by the pandemic and other economic factors.
