Seoul: The South Korean won's real effective exchange rate (REER) has plummeted to its lowest level in approximately 16 years, based on recent data.

According to Yonhap News Agency, data from the Bank for International Settlements (BIS), as released by the Bank of Korea, indicates that the won's REER was at 89.09 at the end of October. This represents a decline of 1.44 points from the previous month.

This level marks the weakest since August 2009, when the REER was recorded at 88.88. Additionally, it falls below the 89.29 level seen at the end of March, a period marked by political uncertainty after the brief imposition of martial law by former President Yoon Suk Yeol.

The REER is a measure of a currency's strength relative to a basket of other currencies, adjusted for inflation, and is often used to gauge a nation's international price competitiveness. A REER below 100 indicates that the currency is undervalued.

Among the 64 countries listed by the BIS, South Korea's REER at the end of October was the third lowest, following Japan's at 70.41 and China's at 87.94. The won's monthly decline of 1.44 points was the second fastest globally, only behind New Zealand's 1.54-point decrease.

This decline represents South Korea's largest monthly REER drop in seven months, following a 1.66-point fall in March of this year. Park Ji-hoon, an analyst at Hana Bank, noted that strengthened risk-averse sentiment has bolstered the U.S. dollar. The increased dollar buying by Koreans investing in U.S. stocks has further weakened the won. Additionally, South Korea's relatively stable inflation has contributed to the REER's decline.