WhyItDropped

KOSPI · March 20, 2020

The day the dollar worry lifted

+7.44%

single-day change vs previous close

Part of a longer stretch

Korea's COVID rebound

early in it · 2020-03-19 → 2020-11-23, +78.55% over the whole period

What happened that day?

  • The KOSPI rose 7.44% on the day. The previous session had been the bottom of the covid crash
  • The Bank of Korea announced a currency swap with the US Fed worth sixty billion dollars
  • It secured a line to borrow dollars when needed, sharply reducing the fear of reserves running dry
  • The measure works especially well in Korea because of 1997. This market knows in its bones what happens when dollars dry up
  • The won strengthened right after the announcement and foreign selling eased
  • It was not a one-day affair — the advance that began here ran to November of that year

Sources

Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.