Seoul, March 31 – The South Korean currency plummeted sharply to a 17-year low against the US dollar on Tuesday, as the escalating Middle East conflict fueled fears of further disruptions to global oil supplies and broader economic impacts.
The won was quoted at 1,530.1 won per dollar, down 14.4 won from the previous session, extending its losing streak to a fifth consecutive day, according to the Yonhap news agency.
The level on Tuesday marked the lowest since March 9, 2009, on a closing basis, when the won hit 1,549 as the country grappled with the global financial crisis.
"We are closely monitoring the market, as foreign investors have been selling local stocks heavily," Yoon Kyung-soo, director general of the Bank of Korea's international department, told a press briefing, noting that the pace of the won's depreciation has been rapid.
"If market sentiment becomes overly one-sided and the won shows excessive divergence from other currencies, we will take action," he added.
The won has hovered around the psychologically significant 1,500 mark in recent sessions, as the war, which began in late February following U.S.-Israeli strikes on Iran, shows no sign of ending.
On Monday (U.S. time), U.S. President Donald Trump threatened to "completely obliterate" Kharg Island, a key oil hub, along with Iran's power plants and oil facilities if a peace deal with Washington is not reached "shortly."
Tehran has dismissed the U.S.' peace proposals as "unrealistic, illogical and excessive," while a parliamentary security committee approved a draft bill to introduce a toll system for the Strait of Hormuz, according to foreign media reports.
The escalating conflict pushed up global oil prices. U.S. West Texas Intermediate (WTI) crude futures for May delivery rose 3.25 percent to US$102.88 per barrel Monday (U.S. time), surpassing the $100 mark on a closing basis for the first time since July 2022.
Higher oil prices pressured the won by boosting demand for dollars for crude imports. South Korea relies heavily on imports for energy.
Heavy foreign selling of local shares also added to the downward pressure on the currency.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 4.26 percent to 5,052.46 on Tuesday, as offshore investors dumped a net 3.84 trillion won ($2.51 billion) worth of shares.
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