Won-Dollar Rate Shots Above 1,500
By Kim Tae-gyu
Staff Reporter
The won-dollar exchange rate closed above 1,500 won Friday for the first time in almost three months while the won-yen rate reached a record high due to fresh concerns over the financial crisis.
The Korean won has depreciated nine sessions in a row since Feb. 10 closing at 1,506 won per dollar, down 25 won from its previous close, and the lowest since Nov. 24 last year.
The local currency also depreciated sharply against the Japanese yen, ending up at 1,599.41 won per 100 yen, the lowest level since the nation started to officially announce daily data in 1991.
Stock markets also tumbled. The benchmark KOSPI fell 41.15 points, or 3.72 percent, to 1,065.95, while the junior Kosdaq lost 17.53 points, or 4.56 percent, closing at 367.14.
``Jitters originating from Eastern Europe continue to weigh on the market, as people want to hold dollars, considered safe assets,'' Samsung Securities analyst Kim Seong-bong said.
``Before any solution such as a pan-European bailout plan pops up, circumstances will remain similar. For the time being, foreign exchange rates will show high volatility,'' he said.
Concerns have been raised this week that the faltering economic situation in East Europe will negatively affect lenders in West Europe and is feared to bring a second financial storm.
``The punch line is that we cannot come up with a fix on our own because all the bad news is coming from outside,'' Citigroup economist Oh Suk-tae said.
``It's because of our original misdeeds that Korea has too much overseas liability and the economy is fully linked to global markets,'' he said.
Meanwhile, the crumbling currency is wreaking havoc on domestic motorists since gasoline prices are shooting up despite low crude oil prices.
According to the Korea National Oil Corp. Thursday, retail gasoline prices averaged 1,505.63 won per litter across the country, the highest in three months.
The price of gasoline fell below 1,500 won per litter Nov. 17 last year and had headed south ever since to below 1,300 won in Dec. 20, but the weak won has reversed the trend.