By Choi Kyong-ae
Lee Soon-im, a money changer in Seoul, is going through the toughest time of her life this winter due to currency volatility.
January was a "disastrous" month for the 65-year-old who has traded foreign currencies over the past 17 years at Namdaemun market for tourists mainly from Japan or China.
"I didn't sell a single yen during the morning hours and it's really hard to make ends meet with this (job) these days," Lee told The Korea Times in a recent interview. "My income was less than 100,000 won ($93) for the whole of last month. It was the worst month of my whole career."
With the temperature down to minus nine degrees Celsius, the unregistered currency changer was hopelessly waiting for a customer Wednesday. She ate four boiled potatoes for lunch taking shelter from the chilly weather in a small squarely-shaped space fabricated with card board and duct tape.
Things were not much different even for authorized small street corner exchange stores. Few customers were spotted stepping into the outlets for about three hours through 4 p.m. during which time this reporter was around the market.
There is no doubt that the fallout from the yen's plunge is now being felt in stand-alone small money changing stores in major shopping districts across Seoul including Dongdaemun and Insadong. Any further depreciation of the Japanese currency could force some of them to go belly up.
"A couple of stores recently went out of business due to lower income and higher rental costs in this commercial area," Shin Chan-hyu who runs Gold Money Exchange near the entrance of the Myeong-dong shopping district told The Korea Times, Wednesday. "I think this business is at rock bottom with little sign of recovery for the time being."
Analysts expect the yen's fall against currencies such as the dollar and the won will extend through 2014 further hitting Korean businesses which sell products and services to Japan or compete with Japanese rivals overseas.
Large companies such as Samsung Electronics and Hyundai Motor are among businesses hardest hit by currency swings. Every 10-won appreciation against the dollar leads to a 1 percent decline in operating profits of the two Korean companies, analysts said.
Now small money-exchange shops have joined the big exporters.
Many outlets in Myeong-dong, just two to three minutes away from each other on foot, were competing for a small number of customers who were seeking the best currency exchange rates.
Shin, who retired as banker and opened his exchange three years ago, said "the main culprit of the current troubles facing the money-changing business is none other than Abenomics."
The yen's decline accelerated after Japanese Prime Minister Shinzo Abe took office in 2012. His monetary easing plans resulted in weaker yen.
"The number of Japanese tourists fell sharply by nearly three quarters compared to the levels of 2002," Shin said based on his own calculations. A combination of weaker yen, territorial disputes over Dokdo between Korea and Japan, and the unresolved issue of comfort women have further reduced travel demand from Japan, he said.
An 18-year-old Japanese student who only gave her family name of Mai exchanged a 10,000-yen into 105,000 won ($97) at Shin's store. "I will buy cosmetics and won't spend on other items," the rare Japanese tourist said.
Back on Sept. 28, 2012, Japanese tourists could get a much higher 143,400 won for 10,000 yen, Shin said. He earned about 1,000 won from the "mini" deal.
"The number of Chinese tourists has increased in recent years but most of them come to Seoul in groups. Travel agencies usually exchange yuan into won in advance at banks," he said.
There are about 120 exchange stores, registered or not, in the Namdaemun market and the Myeondong areas, according to the Namdaemun Police Station.
Still, the country's registrations for the business rose 2.6 percent to 1,275 as of Dec. 31 last year compared to 1,243 two years earlier, the Bank of Korea said.
"The overall registrations rose slightly because the tourism industry itself is expanding despite the volatility," Lim Jin-soo, an economist at the central bank, said by telephone.
The government eased regulations on money changers in 1999 to boost the tourism industry, allowing them to register to start the business instead of getting prior permission, he said.
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| Two money changers sit idle waiting for Japanese or Chinese tourists in Namdaemun market, Wednesday. / Korea Times photo by Choi Kyong-ae |
January was a "disastrous" month for the 65-year-old who has traded foreign currencies over the past 17 years at Namdaemun market for tourists mainly from Japan or China.
"I didn't sell a single yen during the morning hours and it's really hard to make ends meet with this (job) these days," Lee told The Korea Times in a recent interview. "My income was less than 100,000 won ($93) for the whole of last month. It was the worst month of my whole career."
With the temperature down to minus nine degrees Celsius, the unregistered currency changer was hopelessly waiting for a customer Wednesday. She ate four boiled potatoes for lunch taking shelter from the chilly weather in a small squarely-shaped space fabricated with card board and duct tape.
Things were not much different even for authorized small street corner exchange stores. Few customers were spotted stepping into the outlets for about three hours through 4 p.m. during which time this reporter was around the market.
There is no doubt that the fallout from the yen's plunge is now being felt in stand-alone small money changing stores in major shopping districts across Seoul including Dongdaemun and Insadong. Any further depreciation of the Japanese currency could force some of them to go belly up.
"A couple of stores recently went out of business due to lower income and higher rental costs in this commercial area," Shin Chan-hyu who runs Gold Money Exchange near the entrance of the Myeong-dong shopping district told The Korea Times, Wednesday. "I think this business is at rock bottom with little sign of recovery for the time being."
Analysts expect the yen's fall against currencies such as the dollar and the won will extend through 2014 further hitting Korean businesses which sell products and services to Japan or compete with Japanese rivals overseas.
Large companies such as Samsung Electronics and Hyundai Motor are among businesses hardest hit by currency swings. Every 10-won appreciation against the dollar leads to a 1 percent decline in operating profits of the two Korean companies, analysts said.
Now small money-exchange shops have joined the big exporters.
Many outlets in Myeong-dong, just two to three minutes away from each other on foot, were competing for a small number of customers who were seeking the best currency exchange rates.
Shin, who retired as banker and opened his exchange three years ago, said "the main culprit of the current troubles facing the money-changing business is none other than Abenomics."
The yen's decline accelerated after Japanese Prime Minister Shinzo Abe took office in 2012. His monetary easing plans resulted in weaker yen.
"The number of Japanese tourists fell sharply by nearly three quarters compared to the levels of 2002," Shin said based on his own calculations. A combination of weaker yen, territorial disputes over Dokdo between Korea and Japan, and the unresolved issue of comfort women have further reduced travel demand from Japan, he said.
An 18-year-old Japanese student who only gave her family name of Mai exchanged a 10,000-yen into 105,000 won ($97) at Shin's store. "I will buy cosmetics and won't spend on other items," the rare Japanese tourist said.
Back on Sept. 28, 2012, Japanese tourists could get a much higher 143,400 won for 10,000 yen, Shin said. He earned about 1,000 won from the "mini" deal.
"The number of Chinese tourists has increased in recent years but most of them come to Seoul in groups. Travel agencies usually exchange yuan into won in advance at banks," he said.
There are about 120 exchange stores, registered or not, in the Namdaemun market and the Myeondong areas, according to the Namdaemun Police Station.
Still, the country's registrations for the business rose 2.6 percent to 1,275 as of Dec. 31 last year compared to 1,243 two years earlier, the Bank of Korea said.
"The overall registrations rose slightly because the tourism industry itself is expanding despite the volatility," Lim Jin-soo, an economist at the central bank, said by telephone.
The government eased regulations on money changers in 1999 to boost the tourism industry, allowing them to register to start the business instead of getting prior permission, he said.
