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Markets Plummet on Nuke Test News

Posted October. 10, 2006 06:46,   


The Korean economy was seriously disrupted on Monday by North Korea’s announcement of its nuclear test.

The financial market was hit by the announcement and experienced a “triple weak,” where shares, the value of the Korean won and bond prices nosedived at the same time.

The economy has been suffering from low growth and a shrinking current account surplus, and now it is burdened with decreasing consumption due to security concerns and a possible downgrading of Korea’s credit rating.

The yearly interest rate of 3-year state bonds rose by 0.02% point from last week to 4.59%, dropping the price of bonds.

At Seoul’s foreign currency market, the exchange rate of the won against the dollar rose by 14.80 won from October 4, the previous business day, to close at 963.90. The exchange rate of the won against the Japanese yen rose by 5.70 to 808.66 won per 100 yen.

Meanwhile, the price of “safe asset” gold rose by five dollars from last weekend to $579.60 per ounce.

The government held an emergency meeting to assess the economic situation at the Central Government Complex. The meeting was presided over by Prime Minister Han Myeong-sook, and economy-related ministers discussed ways to reduce negative effects of the North’s announcement on the Korean economy.