N. Korea's nuclear tests caused depreciation of Korean won: report
The South Korean currency depreciated at a sharp clip due to the nuclear tests conducted by North Korea last year, a central bank report showed Thursday.
The report published by the Bank of Korea examined the movement of the won-dollar rate for five trading sessions before and after nuke tests between 2008 and 2017.
It used an analysis model assuming that news articles on North Korean provocations affect the South Korean exchange rates against the U.S. dollar.
North Korea has conducted six nuclear tests since 2006, with the last one carried out last year.
"The South Korean exchange rate depreciated significantly in response to such news during the period of March 2008-August 2011 and around the end of the sample period of August 2017," the report said.
In the 2008-2011 period, the Korean won devalued some 0.5 percent against the greenback, and it remained mostly steady until the 2017 test.
But in the run-up to the strongest detonation in September last year, the local currency declined about 0.1 percent against the dollar.
The report said media reports about a possible war breaking out on the Korean Peninsula rose sharply in the period and stirred up anxiety in the South Korean market amid escalating tensions between Washington and Pyongyang. (Yonhap)