The official currency of South Korea, the South Korean Won (KRW), has a long history dating back over 1,000 years.
Today, the Won is the only legal tender used in daily transactions in South Korea. The Won comes in both coins and banknotes, with the banknotes coming in denominations of #1,000, ₩5,000, #10,000, and ₩50,000.
In this article, we delve into the fascinating history and intriguing facts surrounding the Korean currency, the Won. From its humble beginnings to its current role in the global economy, we explore the evolution of the Won, its unique characteristics, and the cultural and economic forces that have shaped its journey.
Historical Journey of Korean Currency
The history of Korean currency unfolds as a captivating narrative, revealing the nation’s cultural, political, and economic shifts over centuries.
Beginning in the Goryeo Dynasty, bronze and iron coins, known as tongbo and jungbo, circulated alongside imported Chinese currency. Silver vases, ŭnbyŏng, served as currency for the aristocracy.
The Joseon Dynasty introduced copper mun coins, succeeded by the yang in 1892. Unfortunately, Japan’s colonization curtailed the yang’s reign. In the colonial era (1910-1945), the Korean yen, pegged to the Japanese yen, replaced the yang, causing economic hardship.
Post-liberation, both North and South Korea issued their own won, initially pegged to the US dollar. The North Korean won underwent redenominations due to hyperinflation, while the South Korean won achieved stability and strength.
In its modern form, the South Korean won (KRW) is a freely convertible currency with international prominence. Banknotes showcase cultural symbols and figures, reflecting Korea’s rich heritage.
The future of the Korean won is entwined with economic performance and global trends, as South Korea maintains a vital role in the world economy. The legacy of the Korean currency symbolizes resilience, adaptability, and prosperity, leaving an enduring imprint on the nation’s evolving history.
History of Coins
Until 1966, South Korea primarily circulated 10 and 50 hwan coins, later revalued as 1 and 5 won. On August 16, 1966, the Bank of Korea introduced new coins denominated in won, including 1, 5, and 10 won. The 1 won was made of brass, and the 5 and 10 won were bronze. Notably, these were the first South Korean coins to use the common era date format.
In 1968, due to the brass 1 won coin’s intrinsic value exceeding its face value, aluminum 1 won coins were issued. Further cost-saving measures led to the introduction of brass 5 and 10 won coins in 1970, followed by cupronickel 100 won coins in 1970 and cupronickel 50 won coins in 1972. To combat inflation and accommodate vending machines in 1982, 500 won coins were introduced.
In 1983, a new coin series of 1, 5, 10, 50, and 100 won was issued, adopting the layout of the 500 won coins but retaining old themes. Subsequently, in 2006, the 10 won coin was redesigned for cost-effectiveness, using copper-coated aluminum with a reduced diameter.
While 1 and 5 won coins have seldom been in circulation since 1992, they are still produced in limited quantities for annual mint sets. Production costs for coins in 1998 were 35 won for 10 won, 58 won for 100 won, and 77 won for 500 won.
History of Bills
The Bank of Korea has a unique way of designating banknote and coin series, assigning series numbers in Korean alphabetical order to the designs of a given denomination. For instance, a ₩1,000 note issued in 1983 is considered series II (나), representing the second design since the introduction of the South Korean won in 1962.
In 1962, the Bank of Korea introduced notes in denominations of 10 and 50 jeon, 1, 5, 10, 50, 100, and 500 won. The initial issue was printed in the UK by Thomas De La Rue, while later issues were printed domestically. In 1965, intaglio printing techniques were used on 100 won notes for the first time to reduce counterfeiting.
Higher-denomination notes of 5,000 and 10,000 won were introduced in 1972 and 1973, featuring new security measures. In 1982, the 500 won note was replaced by a coin, and in 1983, a new set of notes and coins was issued to standardize the currency. The 2006 series incorporated new security features, and in 2009, a 50,000 won note featuring the portrait of Shin Saimdang was introduced. New security features were added to combat counterfeiting in 2006, leading to the release of redesigned banknotes in 2007.
The latest banknote series, issued in 2017, includes a ₩2,000 note commemorating the Pyeongchang Winter Olympics with enhanced security features.
Inflation and Buying Power of Won
South Korea is grappling with rising inflation, affecting the purchasing power of its currency, the Won. As of November 2023, the Consumer Price Index (CPI) reached 4.5%, well above the central bank’s 2% target, and the highest in nearly a decade. This inflation is driven by high import costs, particularly in energy and food, global economic factors, domestic wage increases, and supply chain disruptions.
The inflationary trend is significantly impacting Korean households, especially in basic needs like food and energy. Low-income families and vulnerable groups are feeling the impact more acutely, which is worsening existing inequalities and lowering consumer confidence, potentially slowing economic growth.
In response, the Bank of Korea has raised interest rates to control inflation and stabilize the Won. Policymakers are also considering other measures, including targeted support for affected groups and addressing supply chain issues.
Looking ahead, the future of inflation and the Won’s value is uncertain, with outcomes hinging on global economic conditions and domestic policy decisions. A key challenge for South Korea will be to manage inflation while maintaining economic growth and social equity. Businesses and consumers in the country will need to adapt to this changing economic landscape.
The Won
The 2006 series of South Korean banknotes comprises various denominations, each distinguished by unique characteristics.
₩1,000
The ₩1,000 note, colored blue, features Yi Hwang and Myeongryundang in Seonggyungwan, adorned with plum flowers on the obverse. It also includes the painting “Gyesangjeonggeodo” by Jeong Seon on the reverse.
₩5,000
The ₩5,000 note, colored orange, showcases Yi I and Ojukheon in Gangneung, accompanied by black bamboo. The reverse side displays “Insects and Plants,” a painting of a watermelon and cockscombs by Yi I’s mother, Shin Saimdang.
₩10,000
The ₩10,000 note, colored green, features Sejong the Great and Irworobongdo, a folding screen for Joseon-era kings. The reverse side exhibits the Globe of Honcheonsigye, Cheonsang Yeolcha Bunyajido C14 star map, and a reflecting telescope at Bohyeonsan Observatory.
₩50,000
The ₩50,000 note, colored yellow, features Shin Saimdang with Chochungdo – a Folding Screen of Embroidered Plants and Insects (South Korean National Treasure No. 595) in the background. The reverse side depicts bamboo and a plum tree.
Currency Usage in Korea
Currency usage in South Korea predominantly revolves around the official currency, the South Korean Won (KRW). It is widely accepted for various transactions, ranging from everyday purchases to rent and salaries. While cash remains prevalent, especially for smaller transactions and in traditional markets, card payments, particularly in larger stores and urban areas, are gaining popularity.
Foreign currencies like US dollars or Euros have limited use in daily transactions, with currency exchange services available mainly for visitors or specific needs. High-end hotels or tourist shops might accept major foreign currencies, but this is not the norm.
South Korea boasts a well-developed cashless infrastructure, with popular mobile payment apps like KakaoPay and NaverPay widely used for purchases, transfers, and even public transportation fares. Contactless payments through credit or debit cards are also common, providing convenience and security.
For visitors, it is advisable to exchange some KRW before arrival to have cash for immediate needs. While cash is recommended for smaller transactions, embracing mobile payments by downloading a popular Korean payment app can enhance convenience. Bringing large amounts of foreign currency is unnecessary, as easy exchange options are available in the country.
Coin usage is on the decline, although still legal tender, while tipping is not customary in South Korea. Bargaining is acceptable in traditional markets, with politeness and respect being key during negotiations.
Is USD accepted in Korea?
While USD is accepted at some tourist locations, the Won is the dominant currency for daily transactions in Korea. Some large hotels and shops in popular tourist areas may accept foreign currencies like USD; however, the Won is by far the most widely accepted currency throughout Korea.
For the best exchange rates and lowest fees, it is recommended that visitors exchange their currency for Won upon arrival in Korea. Many money exchange booths and banks located in airports, train stations, and downtown areas offer currency exchange services.
Exchanging Currency in Korea
While the South Korean won (KRW) is the primary currency in Korea, there are instances where exchanging foreign currency becomes necessary. This can include situations such as arriving from a country with a different currency, receiving foreign currency like USD or Euros, or opting for traveler’s checks for security. To exchange currency, various options are available:
Banks, such as Shinhan Bank or Woori Bank, provide secure but potentially less competitive rates with longer wait times. Currency exchange counters at airports, including Incheon International Airport, are available, but rates might be less favorable.
Where can I exchange Korean currency?
Exchanging your currency once in Korea, either at the airport, banks or currency exchange counters, will provide the best rates. Many locations even offer currency exchange services with no additional fees. The exchange rates at these locations are usually very close to the official daily exchange rate, so you’ll get the most value for your money.
There are a few options for exchanging currency in Korea. You can exchange money at most airports, including Incheon International Airport in Seoul. However, the exchange rates may not be the most favorable. It’s best to compare rates from different places. Many major banks in
Korea offers currency exchange, like KB Kookmin Bank, Shinhan Bank, and NH Nonghxup Bank. They typically have the best rates. You can also find currency exchange kiosks and counters in Meongdong, Longdaemen Market, Mamdaemun Market, and other areas popular with tourists.
When exchanging money, bring your passport for identification and request smaller bills for convenience. The most common are 1,000 and 5,000 Won notes. Be prepared to pay exchange fees, typically a flat rate plus a percentage of the amount exchanged.
What to know before exchanging currency in Korea
When traveling to South Korea, it’s important to understand the country’s currency and exchange rate. The official currency of South Korea is the South Korean Won (KRW). Several major world currencies can be exchanged for KRW, including USD and Euro.
Most large banks and currency exchange offices throughout South Korea will exchange your currency for KRW. It’s best to exchange at least some of your money once you arrive in the country, as the exchange rates are usually better. However, you can also exchange a small amount before leaving home in case you need KRW for taxis, meals, or other expenses immediately upon arrival.
In Korea’s cities, paying with a credit or debit card is common at hotels, restaurants, and stores. However, in smaller towns and markets, it is a good rule of thumb to always have at least 20,000 to 50,000 KRW in small bills (1,000 and 5,000 KRW notes) on hand for taxis, street food, and small stores.
For the best experience in Korea, come prepared with both cash and cards. Exchanging currency upon arrival provides you with quick access to Won for immediate expenses. Using credit cards when possible prevents you from having to withdraw too much cash at once.
For the best rates, exchange a larger sum at once rather than multiple small amounts. You’ll need to present your passport and the exchange fees are usually around 1-3% of the amount exchanged. ATMs are plentiful but can charge high international withdrawal fees, so exchanging cash is often cheaper.
Following these tips will ensure you have an easy time paying for everything during your trip to the bustling, modern, and cash-centric country of Korea.
Choosing Between USD and Won in Korea
When traveling to South Korea, you’ll need to decide whether to bring U.S. dollars or exchange your currency for Korean won (₩). Both have their pros and cons, so consider the following factors:
No matter which currency you choose, be wary of potential scams like rigged taxi meters, exorbitant attraction fees, and unscrupulous money exchangers. Do some research on typical costs in Korea to avoid paying too much. When exchanging money, choose an authorized currency exchange or bank to get the official exchange rate and a receipt for your transaction.
Using a mix of dollars and won during your trip to Korea can give you the benefits of both. Just be sure to factor in any fees for exchanging currency more than once and keep an eye on the current exchange rate to get the best deal. With some common sense precautions, you can enjoy using the local currency without worry.
Exchange Rate
Using dollars is convenient since many stores and restaurants in popular tourist areas accept USD. However, the exchange rate may not be as good as exchanging for won beforehand. You’ll also miss out on the full cultural experience of using the local currency.
Exchanging for won gives you the best exchange rate and lets you pay for items like public transit, food from local vendors, and attractions listed in won. You’ll need to exchange currency at a bank or currency exchange booth, though, and carry more cash since the won is mainly used for small transactions.
Compare the current exchange rate to determine if exchanging a bulk of your funds to won or just bringing some dollars is more budget-friendly. You may find the best deal is exchanging most of your money for won but keeping $50-100 in smaller bills for convenience.
Convenience
South Korea is a very technologically advanced country, with conveniences that make life easy. Things like public transit, contactless payments, and efficient infrastructure minimize costs. You can get almost anywhere in the country quickly by bus, train or subway. Cash is rarely used as most transactions are done electronically via cards or mobile apps.
Fees
Most ATMs don’t charge fees for withdrawing money and currency exchanges are also very affordable. While credit cards are widely accepted, check with your bank for any international fees before using them in Korea.
Tips
When traveling to South Korea, it’s important to exchange your currency for Korean won (W) to pay for goods and services. Here are some tips to get the most out of exchanging money in Korea:
Look for authorized money exchange counters like those in airports, hotels, and banks. They offer fair exchange rates and charge minimal fees. Avoid private vendors on the street to prevent scams. Compare rates at different locations. Airport exchanges may charge higher fees, so you may get a better deal in the city.
Bring your passport. You’ll need to show it to exchange currency. Have small bills in USD or your home currency for the best rate. Large bills can be harder to exchange. Ask about any additional charges or commissions before exchanging money. Some places charge higher fees than others
Once you’ve exchanged money, keep your receipt or exchange ticket in case you want to exchange any unused won back later.
Most places will only exchange currency with proof of exchange. Spend or deposit any leftover won before leaving Korea. Won is difficult to exchange outside the country.
Following these useful tips for exchanging currency in South Korea will ensure you get the most for your money and avoid unnecessary fees or hassles. With won in hand, you’re ready to experience all the shopping, food, and adventures Korea has to offer!
Cost of Living in Korea
The cost of living in South Korea varies, being reasonable compared to some Asian countries but not as cheap as others. While Seoul is the most expensive, other cities offer a decent lifestyle without stringent budgets.
According to Expatistan, Housing is the largest expense, costing 30-40% of your monthly salary for a nice place. People in Seoul can choose between high-rises or more local communities on the outskirts. Incheon, Jeju Island, and Busan are also relatively expensive.
Monthly living expenses for a family of four (excluding rent) average 2,300,000 KRW (2,000 USD) nationally, with Seoul being the highest at 2,700,000 KRW (2,300 USD). For a single expat (including rent), the average is 652,000 KRW (560 USD), with Seoul again being the highest at 711,000 KRW (600 USD). Utility costs are around 100,000 KRW (84 USD) monthly.
Grocery prices are reasonable, but wine can be expensive. Eating out costs vary, with dinner for two at a cheap restaurant around 20,000 KRW (17 USD) and a nice restaurant around 56,000 KRW (50 USD).
Education costs range from free public schools to expensive international schools. Annual tuition for private education is 15,000,000 to 42,000,000 KRW (12,600 to 35,300 USD). University tuition ranges from 2,000,000 to 7,000,000 KRW (2,100 to 5,900 USD).
South Korea has an excellent public healthcare system, costing about 7% of your salary per month, approximately 120,000 KRW (100 USD).
Private health insurance is an option, costing around 114,000 KRW (100 USD) monthly. Transportation costs depend on factors like owning a vehicle or using public transit.
Gasoline costs around 1,460 KRW (1.20 USD) per liter, while travel between cities ranges from 17,860 to 60,000 KRW one-way (15 to 50 USD). Subways within cities are about 2,300 KRW per ride (2 USD), and taxi fares start at 3,500 KRW (3 USD) and can go up to 24,000 KRW (20 USD) for a thirty-minute ride.
The cost of living in Korea can vary based on factors like your lifestyle, location, and spending habits. Consider factors like location, lifestyle, and travel plans when budgeting, as Seoul is more expensive, and travel adds to expenses.
Don’t Get Scammed Tips
Ensuring a safe and scam-free experience during your trip to Korea is crucial for a smooth and enjoyable journey. Here are some helpful tips to confidently navigate this vibrant country:
- Stay Informed about Common Scams. Watch out for fake taxis; always use official stands or ride-hailing apps. Be cautious with street performers, as some may expect excessive tips. Guard against pickpockets in crowded areas; secure your valuables. Be cautious of suspiciously low-priced souvenirs; buy from reputable stores.
- Maintain Vigilance and Trust Your Instincts. Keep valuable items concealed to avoid drawing attention. Be cautious of unsolicited offers; if it sounds too good to be true, it probably is. Learn basic Korean phrases to navigate interactions more effectively. Stick to well-lit areas at night, especially in unfamiliar neighborhoods.
- Familiarize Yourself with Korean Customs. Learn about local customs to avoid misunderstandings and scams. Remember that most people in Korea are honest and welcoming.
- Stay alert in busy tourist areas like Meongdong, Dongdaemun Market and Namdaemun Market in Seoul, as well as locations near attractions. Scammers often target people in crowded places who seem distracted. Carefully count your money before leaving the exchange counter to ensure you received the correct amount. Politely ask the teller to recount in front of you if anything seems off.
- Never feel pressured into exchanging currency. Take your time to evaluate options and trust your instincts. If something feels off about a particular money changer, move on to the next one.
By staying cautious, informed, and respectful, you can minimize the risk of scams and fully enjoy exploring Korea.
