Business, Economics and Jobs

South Korean won hit hard by continuing conflict with North Korea


The Korean stock index is reflected on glass on the final day of trading for 2011 at the Korea Exchange in Seoul on December 29, 2011. The South Korean export data this morning was one of multiple signals that the economy might be slowing down.


Jung Yeon-Je

South Korea's Kospi index tumbled to a four month low on April 4th, the sharpest decline since November 15th — an economic malady that can likely be chalked up to continuing tensions with the North.

The South Korean won also tumbled to a half year low, as the threat of a potentially nuclear conflict with North Korea's belligerent regime scared off potential investors.

Read more from GlobalPost: North Korea bars entrance to Kaesong Industrial Park

The Yonhap News agency reports that the Korean Stock Indiex fell 23.77 points to 1,959.45, with Samsung, Hyundai, and Kia all looking downwards.

“North Korea is heightening its threats day by day and that risk factor is having a negative impact on South Korean financial markets,” said Samsung Futures Inc analyst Jeon Seung Ji to Bloomberg.

“Rising tension is prompting foreign investors to sell more Korean stocks, weakening the currency. In the meantime, exporters are likely to look for a point to sell dollars.”

North Korea closed the gates to the joint Kaesong industrial park this week, forcing South Korean workers — mostly in management roles — to leave.

Now, the North is threatening to remove the over 53,000 North Koreans who work for 123 South Korean firms at the complex according to the Yonhap News Agency, another threat to the health of the South Korean economy.

"If the South Korean puppets and conservative news media keep badmouthing (us), we will order all our workers to pull out from Kaesong", said a North Korean spokesman to the KCNA news agency, apparantly replying to South Korea's assertion that it had a military contingency plan to ensure the safety of its workers at the park.

"The full closure of the complex is set to become a reality," the spokesman warned, according to AFP.