1,500Burden grows for SMEs and airlines as the won–dollar rate moves through the won range
The won–dollar exchange rate is 1,500moving through the won range, driving up the cost of imported raw materials and energy and placing a cost burden on a wide range of industries, including construction materials, aviation, food and IT. Industry groups are calling for reduced damage through expanded access to foreign-exchange hedging instruments such as forward exchange contracts and currency options.
![1,500Burden grows for SMEs and airlines as the won–dollar rate moves through the won range/blog-images/gen-5fd45809-01ab-4e49-8046-358543a8c505.jpg)
The won–dollar exchange rate is 1,500moving through the won range, driving up the cost of imported raw materials and energy and placing a cost burden on many domestic companies. As a result, the impact is being felt across industries, including construction materials, aviation, food and information technology (IT).
The cement industry is facing a growing burden as the price of bituminous coal rises along with the exchange rate. One company said it was reporting related losses due to exchange-rate fluctuations.
This year, in the 1quarter, it recorded net foreign-currency translation losses of 48hundred million won4000and approximately ten-thousand won. The company is facing both substantial foreign-currency financial liabilities and exposure to exchange-rate fluctuations.
Low-cost carriers (LCCs) are also struggling with the burden of exchange rates. This is because fuel costs and foreign-currency payment items account for a large share of operating expenses.
Rising raw material prices are expected to potentially drive up finished-product prices and affect consumer prices. The industry is closely watching the pass-through of higher costs into product prices.
Industry groups are calling for greater access to currency hedging and urging the government to establish market-stabilization mechanisms, such as forward exchange contracts and currency options, as well as infrastructure to support corporate responses. The aim is to mitigate the impact of real-cost shocks caused by exchange-rate fluctuations.
Sources: 파이낸셜뉴스 산업
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