A 10 percent rise in foreign exchange rate of the Korean won against the U.S. dollar would reduce ordinary profit rate of steelmakers by 1.3 percent point. In the Seoul foreign exchange market, the local currency closed at 1,150.2 won, a 34-month low, against the U.S. dollar September 22 and the national economy has been put on emergency alertness. Experts said that the negative effect of the rise in the Korean won on steel industry would not be series, while electronics and transportation equipment sectors would suffer heavy damage with large shrinkage in ordinary profits from a fall in the foreign exchange rate of the won. According to a survey result from the LG Economic Research Institute (LGERI) on the major 50 manufacturing firms including 5 steelmakers, sales of which account for 77 percent of total sales of 293 trillion won by the whole manufacturing companies across the country, if the Korean won appreciate 10 percent, the ordinary profit rate of the manufacturing firms surveyed would slide 3 percent points, while steelmakers alone would mark slower drop of 1.3 point. Other sectors like transportation equipment and electronics were estimated to see a steeper fall of 5.8 percent points and 4.6 points, respectively, while oil refinery and beverage sectors were foreseen to rise 2.4 percent points and 0.5 percent point, respectively.
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