Korean won falls further against dollar amid oil price surge, supply woes
A plume of smoke billows following reported Israeli strikes in the southern suburbs of Beirut, after an escalation between Hezbollah and Israel, amid the U.S.-Israeli conflict with Iran and Lebanon, Friday. Reuters-Yonhap
The Korean currency fell markedly for the second straight session against the U.S. dollar Friday as Middle East tensions pushed oil prices higher and fueled concerns about supply disruptions.
The won was quoted at 1,493.7 won per dollar, down 12.5 won from the previous session, after posting a 14.7 won decline in the previous session.
The weakness came as global oil prices spiked again overnight, hovering around $100 per barrel, after Iran's new leader, Mojtaba Khamenei, warned that the Strait of Hormuz would remain closed, raising concerns about supply disruptions and escalating tensions in the Middle East.
The foreign exchange and stock markets have shown high volatility since last week as the U.S.-Israeli attacks on Iran have escalated tensions across the broader region.
On Monday, the local currency fell to 1,495.5 against the greenback, the lowest level since March 12, 2009, when the country was reeling from the global financial crisis.
Higher oil prices put downward pressure on the Korean won as they increase the country's demand for dollars to pay for crude imports. Korea depends heavily on energy imports.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 1.72 percent to 5,487.24 on Friday amid broad risk-off sentiment.