Forecasts that the exchange rate will soon hit the W1,400 mark seem to be coming true, as the won weakened against the U.S. dollar for the fourth consecutive session Wednesday, ending at W1,390, its lowest in over a decade.

The Korean won is suffering as the global economic crisis increases demand for the dollar, leaving the currency market with a shortage.

The country's main index, KOSPI, sank more than 5 percent, closing below the 1,300 level for the first time since August 2006 on a selling spree of local stocks by foreign investors. It closed at 1,287 points, down a whopping 79 points from the previous session. The junior KOSDAQ also lost over 30 points to close at 371.5 points.

Domestic losses were triggered by volatile overnight activity on Wall Street. Aside from an overall loss of investor confidence in the market, U.S. Federal Reserve chairman Ben Bernanke fanned the flames by saying the ongoing financial crisis could prolong the country's economic difficulties -- a comment which investors evidently took to heart.

Arirang News