The won-dollar exchange rate is close to 1,500 won...A 'direct strike' on the small and medium-sized industry.

The won-dollar exchange rate has soared from 1,300 won to close to 1,500 won at the beginning of the year, hitting the small and medium-sized business community particularly hard.

According to a survey of 304 small and medium-sized export companies conducted by the Korea Federation of Small and Medium Business in August last year, 49.9% of the companies responded that they did not manage the risk of exchange rate fluctuations separately.

As a result, small and medium-sized enterprises, which have been importing raw materials from overseas and focusing on domestic demand, have been hit directly by the recent surge in the exchange rate.

According to a study on the exchange rate risk analysis of small and medium-sized companies released by the Small and Medium Venture Business Institute in September, foreign exchange gains and losses accounted for up to 25% in terms of operating profits of manufacturing SMEs.

The researcher explained that if the amount of cash coming into companies decreases due to a surge in the exchange rate, product competitiveness and investment costs will decrease, leading to a vicious cycle, and that unlike large companies, small and medium-sized companies are immediately hit.