Posted March. 03, 2009 03:35,
The Korean financial market yesterday saw significant fluctuation due to uncertainty surrounding the global financial market and aggravating economic indicators at home.
The Korean won fell to its lowest level in nearly eleven years to close near 1,600 per dollar. The benchmark KOSPI stock market is expected to fall below 1,000 soon.
Several market participants even predicted that the won-dollar rate will even surpass 1,700.
Experts said the Korean financial market, which is widely open to foreign investment, has been hit hardest as U.S. and European investors began withdrawing their investment from emerging economies amid mounting fears of a impending financial shock like the collapse of Lehman Brothers in September last year.
In Seoul, the won-dollar exchange rate soared 36.3 points from Friday to close at 1,570.3 won per dollar, the weakest value for the won since 1,582 on March 11, 1998.
The rate yesterday rose to as high as 1,596 in intra-day trading but fell to 1,570.3 after apparent government intervention. The won-yen exchange also soared 39.97 points to 1,610.89 won per 100 yen, shattering all previous records since 1977.
The KOSPI plunged 44.22 points (4.16 percent) from Friday to close at 1,018.81. For 15 straight trading days until yesterday, foreign net selling reached 400 billion won (254 million dollars), the highest this year.
Experts said investor confidence has taken a hit due to the nationalization of U.S. banks and the looming default crisis in Eastern Europe.
Most securities companies predicted that the KOSPI will fall at least temporarily to 938.75, the lowest point last year. Goldman Sachs forecast that the figure could plummet to 735.