Exchange Rate Surpasses 1,200 Won... Highest in 14 Months

Concerns Over Inflation Rise Due to Import Price Surge
Samsung Electronics Stock Falls Below 70,000 Won for First Time This Year
Bank of Korea Holds Interest Rate This Month, Likely to Raise Next Month

On the 8th, the KOSPI opened at 2,977.82, up 18.36 points (0.62%) from the previous trading day, at the Hana Bank dealing room in Jung-gu, Seoul. The won-dollar exchange rate started at 1,190.0 won, down 0.4 won from the previous trading day. Photo by Hyunmin Kim kimhyun81@

[Asia Economy reporters Jang Se-hee and Lee Min-ji] As international oil prices hit their highest level in seven years, fueling inflation concerns, the won-dollar exchange rate surpassed 1,200 won intraday for the first time in one year and two months. Samsung Electronics' stock price fell below 70,000 won for the first time this year, and the KOSPI also struggled to avoid weakness. The Bank of Korea's Monetary Policy Committee decided to maintain the base interest rate at 0.75% considering stock market volatility and weak economic indicators.

On the 12th, in the Seoul foreign exchange market, the won-dollar exchange rate started at 1,196.0 won and reached 1,200.4 won at 10:05 a.m., setting a new yearly high. Intraday, this was the highest level in about one year and two months since July 28 of last year (1,201.0 won). This is interpreted as a result of strengthened risk-averse sentiment due to inflation concerns caused by rising oil prices.

Samsung Electronics' stock price also fell below the 70,000 won mark for the first time. The stock market plunged together, pushing the KOSPI to its yearly low. As of 10:17 a.m., Samsung Electronics was at 69,100 won, down 2,300 won (3.22%) from the previous day. Foreign investors' selling pressure dragged the stock price down, with over 10 million shares sold each at foreign securities firms C.L.S.A and C.S counters. This is the first time Samsung Electronics' stock price has fallen below 70,000 won since December 3 of last year.

Both the KOSPI and KOSDAQ indices failed to avoid sharp declines. At the same time, the KOSPI dropped 1.83%, threatening the 2,900 level, while the KOSDAQ fell 1.65% to the 937 range. Foreign investors net sold more than 350 billion won in the KOSPI and over 100 billion won in the KOSDAQ. KOSPI 200 futures also saw net sales exceeding 490 billion won.

Domestic financial market instability is expected to continue for the time being alongside inflation concerns. Ji-young Han, a researcher at Kiwoom Securities, said, "The Korean stock market is expected to show a downward trend as it absorbs external uncertainties such as the U.S. September employment shock and global inflation concerns. The reemergence of the strong dollar is also expected to create a negative environment for foreign investor supply and demand conditions sensitive to exchange rate changes."

Professor Sung Tae-yoon of Yonsei University's Department of Economics diagnosed, "Won depreciation is likely to raise import prices, acting as an additional inflationary pressure."

On the same day, the Bank of Korea's Monetary Policy Committee also decided to maintain the current base interest rate at 0.75% annually, considering financial market instability. The committee had raised the rate by 0.25 percentage points for the first time in 15 months on August 26.

However, this meeting took into account recent weak economic indicators and the highly volatile stock market. There is a high possibility of an additional rate hike at next month's meeting.

This content was produced with the assistance of AI translation services.