» A customer makes a phone call at an Korea Exchange Bank in Joong-Gu, Seoul on March 14.

It’s back. The era when people must pay 1,000 won for one U.S. dollar is here again. The cost of 100 Japanese yen is at more than 1,000 won. At the foreign exchange brokerage in Seoul, the won’s value dropped to nearly 1,000 won versus the dollar, an increase of more than 60 won in 11 trading days.

On March 14, the Korea Exchange Bank set the won’s retail reference rate at 1014.75 per dollar as of 3:05 p.m. The rate was stable at the level of 1010 won, after rising to 1001.01 in the previous day of trading. It was the first time in almost two years that the retail rate surpassed 1,000 won versus the dollar.

The won’s retail reference rate versus the Japanese yen stabilized at 1012.72 per 100 yen, pushing the rate to above 1,000 for the first time in nearly three years.

Meanwhile, the won-yen exchange rate increased by 14.90 won to close at 997.30 won per dollar as banks finished trading. The exchange rate for won to yen has risen by 60.80 won for 11 trading days in a row. In particular, the increase on March 14 was the largest one-day value loss since October 9, 2006, when the won’s value increased by 14.80 won due to the North Korean nuclear test. At that time, the won also increased to 995.30 won per 100 yen, up 4.9 from the previous day.

The won’s decline gained momentum after foreign investors sold more stocks in South Korea than they bought and exchanged dividend payments into U.S. dollars. Amid speculation that demand for the dollar would continue to increase, asset management companies and importers also purchased the U.S. currency, adding pressure on the won.

However, the U.S. dollar has hit fresh lows against other major currencies as well. At another point during the day, the dollar struck an all-time low against the euro and broke the 100-yen level.

Meanwhile, the South Korean stock market was badly hit amid persistent concerns over the U.S. credit squeeze and the won’s rapid decline. The benchmark Kospi index fell to as low as 1,570 at one point on March 14, but pared its losses later. The index closed at 1600.26, down 15.36 points, or 0.95 percent.

Elsewhere, the prices of oil and gold climbed to new heights. At the New York Mercantile Exchange, the price of the benchmark West Texas Intermediate crude for April delivery breached $111 per barrel at one point in trading on March 13. The price of gold for April delivery breached $1,000 per ounce for the first time, climbing to $1001.5 per ounce at one point in trading on the same day.

Please direct questions or comments to [englishhani@hani.co.kr]