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S.Korea's financial markets fall into panic on looming Brexit fears

Xinhua, June 24, 2016 Adjust font size:

South Korea's financial markets on Friday fell into panic on looming fears over Brexit, or British exit from the European Union (EU), caused by recent results of the referendum to let Britain leave the EU.

The South Korean currency was quoted at 1,178.7 won against the U.S. dollar as of 1:30 p.m. local time, down 28.5 won from the previous close. The daily volatility of 33.1 won was the highest since Sept. 23, 2011 when the European fiscal crisis rattled global markets.

The voting results to favor the British exit from the EU was not in line with market expectations, leading market players to purchase the U.S. dollar considered as safe haven.

South Korea's foreign exchange authorities conducted smoothing operations to intervene in the FX market showing panic moves, but it failed to stop the dollar purchases.

The won/yen exchange rate was quoted at 1,167.88 won per 100 yen as of 1:30 p.m., up 69.05 won from the previous close due to strong demand for the Japanese yen, regarded as safe haven currency among traders.

The benchmark KOSPI tumbled more than 4 percent to fall below the 1,900 points, while the tech-savvy KOSDAQ index plunged 7 percent, issuing a side car alert to stop stock trading for five minutes.

South Korea's financial authorities held an emergency meeting to discuss countermeasures against the highly expected British votes to leave the EU.

Attendants at the meeting were vice finance minister, vice chairman of the financial regulator, vice governor of the central bank and the vice chairman of the financial watchdog. Enditem