Seoul: The South Korean won continued its decline against the U.S. dollar on Monday, reaching another seven-month low and moving closer to its weakest level in 16 years. This downward trend is influenced by the selling of stocks by foreign investors.
According to Yonhap News Agency, the won was quoted at 1,477.1 per dollar by 3:30 p.m., experiencing a decrease of 1.5 won from the previous session. This marks the weakest level since April 9, when it ended at 1,484.1 won, the lowest level recorded this year. The April 9 figure was also the lowest since March 12, 2009, when the won closed at 1,496.5 per dollar during the global financial crisis.
Earlier this month, the local currency dipped below the significant 1,450-won threshold for the first time since April and has been under continuous pressure despite authorities' verbal interventions. "The won's weakness stems from a strong U.S. dollar driven by risk-off sentiment, as well as increased dollar-buying by local investors," stated Park Ji-hoon, an economist at Hana Bank.
Offshore investors have been net sellers of South Korean stocks following recent sharp gains, driven by concerns of an artificial intelligence bubble. Meanwhile, local investors have increased their purchases of U.S. equities. The benchmark Korea Composite Stock Price Index (KOSPI) fell 0.19 percent to close at 3,846.07 on Monday, affected by selling activities from offshore and retail investors.