South Korea's won has logged the sixth-highest gain among 38 major currencies over the past five years, data by the Bank for International Settlements showed Wednesday, undermining the competitiveness of the country's exports.

In terms of the real effective exchange rate, the South Korean won has only underperformed five other currencies -- the Chinese yuan, the Icelandic krona, the U.S. dollar, the British pound and the Swiss franc, according to the data.

The BIS has been checking the REER of different countries every month by setting 2010 as its base year. That year the base was set at 100, with a rise meaning an appreciation of the national currency.

REER, the weighted average of a country's currency relative to a basket of other major currencies, serves as a measure of the effect that foreign exchange fluctuations have on a country's exports. A reading above 100 means the country's exchange rate is overvalued, while numbers hovering below the mark shows it is undervalued.

The BIS checked foreign exchange rates of currencies belonging to the 34-member Organization for Economic Cooperation and Development and so-called BRICs countries made up of Brazil, Russia, India and China.

In the September report, the REER of the Korean won stood at 108.33, the highest reached since 107.89 in March 2014.

Numbers for China reached 130.94, while the dollar and the pound rose to 114.05 and 117.13, respectively, mainly due to solid growth posted by these countries.

The krona, fueled by high inflation that caused Reykjavik to mark up its interest rates twice this year, has been rising steadily against both the euro and the U.S. greenback, while the Swiss currency has moved up in the midst of the weakening euro.

"The reason for the won's rise is because the country trades heavily with the European Union, the United States and Japan that have all engaged in quantitative easing," said Hong Seok-chan, a senior research fellow with the Daishin Economic Research Institute.

He pointed out that such developments will lead to higher prices for locally made goods abroad.

In contrast to South Korea, the REER of Brazil fell to 64.18, while the number for Turkey stood at 77.09.

The BIS' latest findings also showed the value of currencies of resource rich countries, such as Canada, Australia and Norway, all backtracked due to weak demand.

On future prospects for the Korean won, local observers predicted the average exchange rate will reach 1,175 won to the dollar in the fourth quarter and hover around 1,200 won to the dollar in 2016. (Yonhap)