South Korea’s financial authorities cautiously watch the fluctuation of the Korean currency’s value against the US dollar in recent weeks, a fresh warning sign that may threaten to undermine the recovery of the country’s economy.

The Korean won against the dollar opened at 1,390.5 won on Monday before hitting an intraday high of 1391.5 won. It closed down at 1,385 won. On Tuesday, the Korean currency has ended at 1,386.5 won.

In the short term, the fluctuations in the past two sessions may not look so unnerving, but if the comparison yardstick expands and the Korean currency was valued at 1,318.6 won against the greenback just a month earlier, things do appear ominous.

Experts at local financial companies expect the strong dollar to continue in the coming weeks, especially in connection with the rising expectations that former US President Donald Trump may win the election slated for Nov. 5.

If reelected, Trump said he would impose massive new tariffs of at least 10 percent on goods from all other nations, a pledge that is forecast to intensify trade frictions and boost the demand for the dollar. Trump’s embrace of strong protectionism in trade policy and his willingness to increase the US national debt is expected to affect the movement of the US dollar in a way that puts more downward pressure on the value of the Korean won.

In addition, the US economy shows strength in employment and consumption, which in turn will encourage the US Federal Reserve to slow its rate-cutting pace -- a factor that experts say has to do with the strong dollar.

Korea’s weak record in exports in the third quarter has helped drive down the value of the won against other major currencies, largely due to a reduction in dollar inflows earned from abroad.

If the current trend continues, Korea’s economic policymakers have to deal with another wave of burdensome challenges linked to the exchange rate that is nearing 1,400 won, a psychologically important level that is often associated with a looming crisis.

One particularly worrisome factor to consider is the strong dollar’s impact on imported goods. In the past, a weaker won boosted the price competitiveness of exports in a way that offered advantages in trade. However, it is difficult to expect such a positive effect since a growing number of Korean companies have set up their subsidiaries and made heavy investments in overseas markets.

The depreciation of the won now comes with more risks since higher prices of imports in dollar terms, especially energy products and raw materials, can stoke inflationary pressures.

Such change on the horizon is clearly not what the financial authorities want to see now. After all, the Bank of Korea cut the benchmark rate by 25 basis points to 3.35 percent on Oct. 11, the first such adjustment since August, largely because it took the 1.6 percent drop in inflation in September as a clear signal for price stabilization.

The falling value of the Korean won, therefore, could act as a constraint on further interest rate cuts by the central bank, which is keen to help stimulate the sluggish economy in general and lackluster domestic demand in particular. Already limited by rising housing prices and the growth of household debt, the BOK’s room for maneuver has been further restricted by a fall in the value of the Korean currency against the dollar. BOK Gov. Rhee Chang-yong said Friday that the recent change in the exchange rate is faster than expected and the value of the dollar is also higher than previously forecast.

Given that a steep fluctuation of the exchange rate poses risks for the broader economy, policymakers must seek ways to remove negative factors and stabilize the value of the Korean currency.