Monthly Archives: October 2008

Erratic exchange rates

zar-krw-exchange rate 2008Source: http://finance.yahoo.com/currency/convert?amt=1&from=ZAR&to=KRW&submit=Convert

The past few weeks have been a financial rollercoaster. The problems on Wall Street are being felt all over the world, and some of the people that feel it most are those that work overseas and send money home, including yours truly (and every other English teacher in Korea). I have spent this time on the edge of my seat watching the exchange rates climb and fall, dragging my stress levels along for the ride.

Average Exchange Rates and Recent Fluctuations

The average exchange rate between the South Korean won (KRW) and the South African Rand (ZAR) since I arrived here in March 2008 has been between 125KRW/1ZAR and 135KRW/1ZAR. So an average monthy salary of 2,000,000 KRW has averaged out at between R16,000 and R14,800. But when the problems on Wall Street became evident in September, things started going a bit haywire.

Over the past two months or so, the exchange rate has gone from an average of 135KRW/1ZAR, up to over 150KRW/1ZAR (weak KRW/strong ZAR), and then all the way down to 114KRW/1ZAR (strong KRW/weak ZAR), and as of today somewhere around 130KRW/1ZAR. Heaven alone knows what the rate will be on Monday.

What do these fluctations mean? Well, at 135KRW/1ZAR, a salary of 2,000,000 KRW is about R14,800. At 150KRW/1ZAR the same 2,000,000 KRW salary is only worth R13,300. And then from that low, an exchange rate of 114KRW/1ZAR is worth R17,500. That’s R4000 difference in salary just on exchange rate fluctuations!

That kind of extreme fluctuation happened two weeks ago. The rate went from 150KRW/1ZAR to 114KRW/1ZAR within two days. So I sent money home to SA at the low point, and did pretty well. If I’d sent money earlier in the week I’d have lost a bundle. I think I got lucky, because I’m not sure where the exchange rate will go from here.

What’s going on?

At the moment, both the ZAR and the KRW are weak against the US dollar. Why this is the case, I can’t really tell you. But from what I understand it probably has to do with perceptions of relative weakness in the South African and South Korean economies. I say perceptions because the South African economy and financial system are very stable, not that international investors see it that way. Anyway, the US dollar is seen as safer than the ZAR or the KRW, so investors are pulling their money out of the South African and South Korean economies. This results in a drop in the relative value of the ZAR and KRW. Why people trust the US financial system even though they are the cause of the current problems (and of the Great Depression) is totally beyond my comprehension.

So at one point the KRW was taking a beating, while the ZAR was doing well. That’s when the exchange rate was terrible for anyone earning KRW. And then two weeks ago the ZAR all of a sudden took a huge dip against the US dollar, and the exchange rate with the KRW improved. Basically, both the ZAR and KRW were doing pretty badly against the US dollar. Misery loves company, and in this case it was a good thing for anyone earning KRW¬† and wanting to send money to South Africa.

Since then the exchange rate has been shooting up and down on a daily basis. I’m not going to send money home for a while, but for when I do I’ve picked an exchange rate range that will be reasonably ok. Anytime the exchange rate hits that, I’ll send money home.

So is it still worth it to work in Korea?

At the moment it’s still worth it to come and work in Korea. If you were American/Canadian/British – hell, anything other than South African – then it would probably not look so good. But since the ZAR and the KRW are both doing about equally badly against the US dollar, it should still be attractive to South Africans. However, the exchange rates are still incredibly volatile, and will likely keep going up and down for the next few months.

The worst exchange rate in recent years was during 2004, when it went as high as 190KRW/1ZAR (very weak KRW/strong ZAR). If that happened again then a salary of 2,000,000 KRW would only be R10,500. At that rate I would probably stay at home, or rather go to China, Taiwan or Japan.

For the moment things seem to have stabilised a little, but with the weak KRW my planned holiday to Japan is starting to look awfully expensive! I’ll be keeping a very close eye on the exchange rates, that’s for sure.

PS:

If you also want to keep an eye on the current rates, check out this link:

http://finance.yahoo.com/currency/convert?amt=1&from=ZAR&to=KRW&submit=Convert

Everday living in Korea (Part 2) – Breakfast

On my previous “Living in Korea” post, one reader commented about what she eats for breakfast. This is important stuff. This was of real concern to me before I arrived, because 1) I knew Koreans don’t really eat Western-style breakfasts, and 2) I was going to live pretty far away from places that sell Western food.

I generally eat cereal for breakfast, with some yoghurt for good measure. In the days before we flew here, I said some tearful farewells to my beloved Kelogg’s Cornflakes and Dairybelle yoghurt. But, to my utmost surprise and pleasure, the first supermarket I walked into after arriving in Korea had a whole shelf full of breakfast cereals. Cornflakes, Frosty Flakes, Fruit Loops – all sorts of stuff. Even some brand names I hadn’t seen before. Did you ever hear your parents talk about “Post Toasties”? Well, you can get them here (they’re cornflakes).

What about yoghurt? Well, that was another pleasant discovery. I haven’t seen a large variety of flavours and brands, but I’ve managed to get apricot, strawberry, pineapple, apple, and even plain yoghurt in Korea. But I’ve only managed to find small ones – about 200ml each.

Milk was another worry. I’d heard that it wasn’t widely available, though I had seen milk aplenty when I was in China. But my fears were unfounded. You can find milk at pretty much any convenience store or supermarket. And you get a choice of brands and everything. There’s even a selection of soy milk and one brand seemingly tailor-made for English teachers – ESL Milk.

Here’s an idea of how much this breakfast will set you back:

One big box (600g) of Kelogg’s Frosty Flakes: 4,400 won

One litre of milk: 2,000 won

One four-pack of 200ml yoghurts: 2,200 won

If you are in the mood for some bacon, egg and toast, you’ll have to be prepared to spend a bit more. Eggs are pretty cheap, but bacon is a bit hard to find, and pretty expensive when you do. I did find a pack the other day, and it cost about 4,000 won for 100 grams. But it did taste good!

Bread can be found everywhere, and you can find yourself a toaster in most major supermarkets. I just use a pan to make myself some toast. Easy (and cheap!).

SA braai this weekend

Some organised and enthusiastic people have arranged a braai for South Africans in Korea. Last time I checked there were over 250 people attending. It promises to be a rocking party!

The braai will be on 11 October in Bucheon. For more details, click on the two links below:

http://www.new.facebook.com/event.php?eid=38426388896

http://www.freewebs.com/sakornet/index.htm