#KospiFallsOnTechSelloff Exchange rate of USD at banks and in the unofficial market (black market) sometimes moves in opposite directions due to the influence of different factors. While the bank exchange rate is managed based on the central exchange rate of the State Bank, the supply of foreign currency in the system, and the payment needs of businesses, the unofficial market responds mainly to the supply and demand of cash and the sentiment of buyers and sellers. When the supply of USD in the banking system is abundant thanks to export investment inflows or remittances, banks may adjust down the buying price or the selling price of USD. Conversely, if the public’s demand to hold cash USD increases due to travel, studying abroad, international payments, or a mindset of concern about market fluctuations, the USD price in the unofficial market can rise sharply even if the exchange rate at banks is falling.
These differences show that the two markets operate under their own mechanisms. The bank exchange rate reflects the administration policy and liquidity of the financial system, while the exchange rate (black market) reflects the real demand and market sentiment. Therefore, it is entirely possible for the bank exchange rate and the unofficial market to move in opposite directions, and this often appears during periods when the market is highly volatile.
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