January 12, 2016 09:52
The continued weakness of the Chinese yuan and plummeting Chinese stock prices drove the Korea Composite Stock Price Index below the 1,900 level, while the won weakened almost to W1,210 against the U.S. dollar.
The Korean currency closed at W1,209.8 on Monday, the lowest since July 19, 2010.
The won also weakened against the Japanese yen on Monday, closing at W1,031.75 per 100 yen, the lowest in almost two years.
The main reason is that investors are shedding the Korean won, which is among the more unstable emerging currencies, as global financial jitters spread due to the Chinese stock market's decline.
But the weakening won is also related the U.S. Fed raising interest rates. The Fed hiked interest rates last month for the first time in seven years, causing the dollar to strengthen even as the yuan weakened due to pump-priming measures to rejuvenate China’s flagging economy.
- Copyright © Chosunilbo & Chosun.com