North Korea has continued to intensify its rhetoric against the South, this time warning all foreigners in the South of the Korean peninsula to evacuate in case war breaks out and as US intelligence suggests that it is preparing a missile launch, in response Seoul had raised its alert level to ‘vital threat’
The ongoing threat of turmoil in the region has caused the South Korean Won to weaken beyond eight-month lows as investors seek safer havens elsewhere. Inadvertently the North’s threats have actually been a positive for the South’s economy as the weaker Won has assisted the country’s exporters who were struggling to compete with the devalued Japanese Yen. The North’s aggression has allowed the Won to devalue without any action being needed by the Bank of Korea.
Assuming no conflict or attack materializes and the threats turn out to be nothing more than talk, this could be something of a win for South Korea.
Goldman Sachs’ Jim O’Neill mentions it briefly in his latest Viewpoints:
“I highlighted Korea a few weeks ago when I detected a shift in the Chinese stance on the North, and in the past week or so, the country seems to be doing the most it can to rile everyone. While some aspects of their posturing are clearly a bit scary, I again find myself asking whether this time it is the beginning of the end of two separated Korea’s? In the meantime, some Korean exporters will be slightly relieved that the current weakness of the Korean Won gives them some respite against the relentless decline of the Japanese Yen.”
Current South Korean Won exchange rates
As of 12.05 pm
The Pound Sterling to Korean Won exchange rate is currently trading in the region of 1740.015
The Euro to Korean Won exchange rate is currently trading in the region of 1488.410
The US Dollar to Korean Won exchange rate is currently trading in the region of 1136.359
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