South Korean shares fell 3.09 pct on concerns over Brexit

By Park Sae-jin Posted : June 24, 2016, 13:12 Updated : June 24, 2016, 17:00

[Photo by Yoo Dae-gil]


South Korean shares plunged 3.09 percent Friday in turbulent trading as Britain voted to withdraw from the European Union following a tight race by rival camps.

The benchmark Korea Composite Stock Price Index (KOSPI) shed 61.47 points to close at 1,925.24. The won ended at 1,179.9 against the US dollar.

Economic and financial officials held emergency meetings, checking their contingency plans to contain the fallout from global market volatility. Financial officials called for calm saying Brexit would have a limited impact on South Korea's economy.

"South Korea's economy is strong enough to ride it out," Vice finance minister Choi Sang-mok said, citing a large amount of current account surplus and foreign reserves. South Korea is the world's seventh-largest holder of foreign exchange reserves.

Pre-vote surveys showed exporters were concerned about higher tariffs in Britain, South Korea's 11th largest export partner, if the Leave camp triumphed.

Foreign Minister Yun Byung-se said in parliament that South Korea would consider a bilateral free trade deal with Britain to cope with its exit from the European Union. A free trade accord between South Korea and the EU went into effect in 2011. Last year, bilateral trade stood at $105.3 billion.

Britain accounted for 1.4 percent of South Korea's total trade last year. At the end of March, the exposure of South Korean financial institutions in Britain was estimated at 7.26 billion US dollars, or 6.3 percent of their total global exposure. The amount of British money in South Korea's stock market accounts for 8.4 percent of total foreign holdings.

The British referendum comes as South Korea struggles to prop up its economy. The Bank of Korea has cut its key rate to a record 1.25 percent to fuel economic improvement, but policymakers have suggested more aggressive fiscal measure should be implemented in the second half.

Aju News Lim Chang-won = cwlim34@ajunews.com
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