In Netflix’s wildly popular South Korean drama, Squid Game, contestants battle each other to their death for the chance to win 45.6 billion South Korean won. That sounds like a boatload, but it's actually a lot less in U.S. dollars—the South Korean currency is one of the weakest in the world. Why is the South Korean won so weak?
Currency rates right now put one South Korean won equal to just 0.00084 U.S. dollars. That’s almost 12 times less than the value of a penny. In U.S. dollars, the Squid Game grand prize equals just about $38.4 million. That’s still a chunk of change, but nowhere near a billion.
The value of the won has declined
The value of the won could decline even further. In Sept. 2021, Bloomberg reported that analysts predict the South Korean currency could fall to 1,200 per U.S. dollar by Dec. 2021 as the U.S. dollar strengthens and exports moderate.
That prediction happened earlier than expected. On Oct. 12, the won slid to 1,200.40 against the dollar, its weakest level in over a year. The decline prompted South Korea’s central bank to consider intervening in the foreign exchange market, reports Nikkei Asia.
The South Korean currency has seen four months of decline, reaching a one-year low in Sept. 2021. As Asia’s most risk-sensitive currency, the won is often an indicator for currencies in neighboring countries, Bloomberg reports.
There are several reasons the South Korean won has weakened against the U.S. dollar over the last 14 months. Those reasons include:
Increasing oil prices.
A strengthening U.S. dollar.
'Squid Game' was inspired by South Korea’s household debt crisis
In the South Korean drama Squid Game, all of the contestants are so mired in debt and strapped for cash that they're willing to risk death for the chance of winning the grand prize. Many see the show as a commentary on the socio-economic inequality and indebtedness of South Korea’s lower and middle class.
South Korea has the third-largest economy in Asia, behind China and Japan. The country is one of the world’s largest exporters of automobiles and integrated circuits for electronic products. However, many of the country’s residents are reportedly living with crippling debt.
South Korea has the highest household debt-to-GDP ratio of all Asian countries, reports Channel News Asia. According to CEIC Data, household debt in South Korea accounted for 106.6 percent of the country’s nominal GDP in March 2021, reaching over $1.867 trillion (in U.S. dollars). Financial hardship is one of the leading triggers for suicides in South Korea, The Korea Herald reports.
There's also a vast disparity between South Korea’s wealthy residents and those in the lower and middle classes. The country’s top 20 percent of earners have a net worth 166 times that of the bottom 20 percent, reports The Conversation.