Complete Guide to USD/KRW Exchange: Converting US Dollars to Korean Won

The USD/KRW exchange rate is one of the most closely watched currency pairs in Asia. Whether you are planning a trip to South Korea, sending money to family, paying for Korean goods, or managing business transactions, understanding how to exchange US dollars to Korean won efficiently can save you significant money.

This comprehensive guide covers everything from current rate dynamics to the best places and strategies for converting your dollars.

Understanding the USD/KRW Currency Pair

The USD/KRW pair represents how many Korean won (KRW) you can get for one US dollar (USD). For instance, if the rate is 1,320 KRW per USD, one US dollar buys 1,320 Korean won. The rate fluctuates constantly based on market conditions, economic data releases, and global events.

South Korea uses a managed floating exchange rate system. While the won's value is largely determined by market forces, the Bank of Korea occasionally intervenes to prevent excessive volatility or to stabilize the currency during periods of extreme market stress.

Historical USD/KRW Trends

Over the past decade, the USD/KRW rate has typically ranged between 1,050 and 1,450 won per dollar. The rate tends to weaken (more won per dollar) during periods of global uncertainty, since the Korean won is considered a risk-sensitive currency. During calmer periods with strong global growth, the won tends to strengthen.

Key events that have moved the USD/KRW rate significantly include the 2008 financial crisis, the COVID-19 pandemic, and US Federal Reserve interest rate changes. Keeping an eye on these macro trends helps you anticipate rate movements.

Where to Exchange USD to KRW

There are many options for converting your dollars to won, each with different advantages and costs.

Banks in the United States

US banks can exchange dollars to won, but they typically offer less competitive rates compared to other options. Most banks add a spread of 3-5% above the mid-market rate, and some charge additional flat fees. If you choose this route, order the won in advance since many branches do not keep Korean won on hand.

Banks in South Korea

Korean banks generally offer better exchange rates for USD to KRW than US banks. Major banks like Shinhan, KB Kookmin, Hana, and Woori have foreign exchange counters at most branches. Rates at Korean banks are typically within 1-2% of the mid-market rate.

Pro tip: Many Korean banks offer discounted exchange rates if you reserve your currency exchange online or through their mobile app before visiting the branch.

Airport Exchange Counters

Currency exchange counters at Incheon International Airport and other Korean airports are convenient but tend to offer some of the worst rates. Spreads can be 5-10% above the mid-market rate. If you must exchange at the airport, convert only a small amount for immediate needs like transportation.

Currency Exchange Shops (Myeongdong and Itaewon)

Private money changers in popular tourist areas, especially Myeongdong in Seoul, often offer the most competitive rates for cash exchange. These shops compete aggressively with each other, resulting in rates that are sometimes better than banks. However, always count your money before leaving the counter and use reputable, licensed exchangers.

Online Currency Exchange Services

Fintech platforms and online remittance services like Wise (formerly TransferWise), Remitly, and OFX often provide rates very close to the mid-market rate with transparent, low fees. These services are particularly useful for larger transfers and regular payments.

ATMs in South Korea

Withdrawing won from ATMs in South Korea using a US debit card is convenient and often offers competitive rates. Look for ATMs that display the "Global ATM" or international network logos (Visa, Mastercard, Plus, Cirrus). Be aware of potential fees from both your US bank and the Korean ATM operator.

Tips for Getting the Best USD/KRW Rate

1. Avoid Airport and Hotel Exchanges

As mentioned, airport and hotel exchange counters typically offer the worst rates. Plan ahead and exchange through better channels.

2. Compare Rates Before Exchanging

Use a currency converter to check the current mid-market rate before exchanging. This gives you a benchmark to evaluate whether the rate you are being offered is competitive.

3. Watch the Timing

Exchange rates can vary significantly over days and weeks. If your trip or transfer is flexible, monitor the rate and convert when conditions are favorable. Major economic announcements from the US Federal Reserve or the Bank of Korea can cause sharp movements.

4. Use Korean Bank Mobile Apps

Many Korean banks offer preferential exchange rates through their mobile applications. Some even offer 50-90% discounts on the normal exchange spread when you reserve currency online.

5. Consider the T/T Rate vs Cash Rate

In South Korea, banks quote two different rates:

T/T (Telegraphic Transfer) rate: Used for wire transfers and digital transactions. This is closer to the mid-market rate.
Cash rate: Used when you physically exchange paper money. This rate includes a wider spread because handling cash has additional costs.

If possible, use digital methods to get the better T/T rate.

6. Be Careful with Dynamic Currency Conversion

When paying with a credit card in South Korea, merchants may offer to charge you in USD instead of KRW. This is called dynamic currency conversion (DCC), and it almost always results in a worse exchange rate. Always choose to pay in the local currency (KRW) and let your card issuer handle the conversion.

Fees to Watch Out For

When exchanging USD to KRW, the exchange rate is not the only cost. Watch out for these common fees:

Bank wire transfer fees: Can range from $15-$45 per transfer.
Intermediary bank fees: International wires may pass through correspondent banks that deduct their own fees.
ATM withdrawal fees: Both your home bank and the Korean ATM operator may charge fees.
Credit card foreign transaction fees: Many US credit cards charge 1-3% on foreign currency transactions. Consider using a no-foreign-transaction-fee card.

How Much Cash Should You Bring to South Korea?

South Korea is highly digitized, and credit cards are accepted almost everywhere in cities. However, having some cash on hand is still useful for:

Small street food vendors and traditional markets
Some taxis that do not accept foreign cards
Smaller shops in rural areas
Temple stays and traditional experiences

A good rule of thumb is to carry 200,000 to 500,000 KRW in cash (approximately $150-$380 USD) for incidental expenses, and use your card for everything else.

Understanding Korean Won Denominations

Korean won comes in both coins and banknotes:

Coins: 10, 50, 100, 500 won
Banknotes: 1,000, 5,000, 10,000, 50,000 won

The 50,000 won note is the largest denomination and is widely used for everyday transactions.

Conclusion

Getting the best USD/KRW exchange rate requires a bit of planning, but the savings can be substantial, especially for larger amounts. Compare rates across multiple providers, take advantage of online and mobile banking discounts, avoid airport exchanges, and always be aware of hidden fees. With these strategies in hand, you can make your dollars go further whether you are visiting South Korea for pleasure, study, or business.