S. Korea's currency falls to new yearly low amid monetary tightening, recession woes
SEOUL, Aug. 31 (Yonhap) -- The South Korean currency fell to a new yearly low in intraday trading on Wednesday amid growing concerns over monetary tightening in the U.S. and the possibility of global economic slowdown.
The local currency was trading at 1,349.5 won against the U.S. dollar as of 9:49 a.m., down 2.8 from the previous day's close. The won fell to as low as 1,352.3 per dollar at one point, which marked this year's weakest level after it hit an intraday yearly low of 1,350.8 on Monday.
The won has been under downward pressure as the U.S. Federal Reserve has accelerated interest rate hikes to tame runaway inflation. The won has depreciated around 12 percent so far this year.
The Fed's monetary tightening and growing worries over an economic recession in the U.S. have pushed up the value of the dollar, which is regarded as a safe asset.
Fed Chair Jerome Powell's hawkish remarks at the recent Jackson Hole meeting also deepened market anxiety. He said the Fed will raise interest rates "for some time" to tame inflation and the move could bring "some pain" to households and businesses with slower growth and job losses.
The South Korean government has voiced concerns over recently increased currency market volatility, saying it will beef up policy efforts to stabilize the financial market to brace for excessive herd behavior in the wake of the Jackson Hole meeting.
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