Tariff war: Korean won dips to lowest level since 2008 global financial crisis

Seoul, April 8 (IANS) The South Korean currency weakened markedly against the US dollar on Tuesday to reach the lowest level in over 16 years amid deepening concerns about the impact of the Donald Trump administration's sweeping tariff plan on the economy.

The Korean won was quoted at 1,473.2 won against the greenback at 3:30 p.m., down 5.4 won from the previous session, reports Yonhap news agency.

The reading marks the lowest level since March 13, 2009, when the won was quoted at 1,483.5 won as the country was grappling with the aftermath of the global financial crisis.

The won opened at 1,471.0 won, down 3.2 won from the previous session, and had dipped to as low as 1,473.75 won during intraday trading.

The local currency has been showing large fluctuations since U.S. President Donald Trump announced plans last week to impose "reciprocal" tariffs on imports from most of the world, including 25 percent duties on South Korean goods.

The country-specific tariffs are set to take effect from Wednesday (US time), while a 10 percent "baseline" tariff on foreign imports went into force from Saturday.

On Monday, Trump also warned of additional 50 percent tariffs on China if Beijing does not withdraw its retaliatory 34 percent tariffs against his country, while noting tariff negotiations with other countries will kick off "immediately."

The local currency has stayed near the 1,450 won level since December amid the U.S. tariff warnings and a domestic political crisis sparked by then President Yoon Suk Yeol's martial law imposition on Dec. 3.

"Volatility in the country's financial and foreign exchange markets is expected to persist. The government will maintain close monitoring of the situation with heightened vigilance," the finance ministry said in a release.

Meanwhile, Seoul shares ended higher on Tuesday, snapping their four-session losing streak, helped by gains in tech and defence industry stocks. The Korean won fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) rose 6.03 points, or 0.26 percent, to close at 2,334.23, bouncing back from a 5.57 percent drop the previous day amid concerns over a global trade war.

Trade volume was moderate at 548.25 million shares worth 8.9 trillion won (US$6.03 billion), with gainers outnumbering losers 544 to 343.

Individuals bought a net 601.54 billion won worth of stocks, offsetting institutions and foreigners' stock selling valued at 89.87 billion won and 642.52 billion won, respectively.

--IANS

na/