Korean Won Rises; Oil Prices Soar
As the exchange rate of the Korean won to the US dollar is rising, the Korean economy is now in an emergency. Additionally, since international oil prices have been continually hitting new records, some experts point out that the continued trend of the Korean exchange rate, which mainly has played a role as a prop, can sweep the Korean export sectors. A source says that there are signs that the Korean economic index is now swinging.
In the Seoul foreign exchange market, the Korean currency soared to 939.50 won per dollar in the opening market and closed at 939.80 won yesterday by 6 p.m. in Seoul. This is the strongest level since October 24, 1997. Last weekend, the Japanese yen rose by 2 yen to the dollar, which triggered the rise of the Korean exchange rate to the dollar.
According to economic and foreign exchange experts, it is likely that growing criticism of Asian currencies could further push up the Korean won this year, negatively influencing the Korean export sectors and its price competitiveness. The Korean Industrial Development Institute analyzed that in the event the exchange rate falls 5%, the increase rate of export volume falls 1.6% points. Another source said, “The Korean currency's continued rally would temporarily chill, but several strengthening factors are still lingering in the market.”
A report says that in the event the exchange rate to dollar falls 5%, the increase rate of GDP will fall 0.35%. In particular, KIET analyzed that if the Korean won falls to 928 won, it is likely that most domestic mid and small-sized companies will not export. With the soaring Korean won, the Dubai oil price also hit a record of 67 dollars per barrel. According to other reports, some market watchers downplayed the possibility of the won's further appreciation, and believe the Korean won has nearly reached its culmination in the foreign exchange market. In the international oil markets, the Dubai oil price rose to 67.48 dollars per barrel yesterday, up 1.69 dollars yesterday; Brent oil is at 74.30 dollars, up 0.12 dollar compared to yesterday.
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 / 입력시간: 2006. 04.26. 09:36
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