As the won-dollar exchange rate remains at unusually elevated levels despite record-high exports fueled by strong semiconductor demand, market attention has increasingly turned to the question of how much ammunition foreign exchange authorities have. Typically, stronger exports lead to increased dollar inflows, which support the won and push down the exchange rate. This time, however, the exchange rate has remained in the psychologically significant 1,500-won range for about two months. The won has fallen about 8 percent against the dollar this year, while the dollar index has risen about 3 percent during the first half. On Monday, the won also remained in the 1,500-won-per-dollar range. A prolonged period of won depreciation could fuel higher import costs, squeeze corporate margins and erode households' real purchasing power. Following the 1997 Asian financial crisis, Korea adopted a free-floating exchange rate system in which the won's value is driven by market demand and supply rather than government-set levels. More buyers of the won push the currency higher, while more sellers put