Lotte, Shilla, Shinsegae and Hyundai Duty Free are raising the reference exchange rate applied to domestic brand products from 1,450 won to 1,500 won. Lotte and Shilla will apply the revised rate starting Monday, while Shinsegae and Hyundai will apply it starting Tuesday.
The reference exchange rate is the rate that duty-free operators apply on their own when setting the dollar-denominated selling price of domestic brand products supplied to them in won. The higher the exchange rate, the lower the duty-free selling price shown in dollars. The latest increase in the reference exchange rate is expected to produce a price reduction effect of about 3% for domestic brand products.
As the weak won persists, the duty-free industry has been raising the reference exchange rate successively to maintain the price competitiveness of domestic brands. Following an increase from 1,350 won to 1,400 won last November and to 1,450 won in March this year, this marks the third hike in eight months.
