Following the news released on Tuesday, the Korean currency is weakening amid the unconfirmed report of Kim Jong’s illness. Reports indicate that the North Korean leader is seriously ill. The Korean currency last fell 0.74 percent, to trade at one thousand, two hundred and twenty-nine per dollar. Now, the roll shows a significant fall as low as one thousand, two hundred and forty-one per dollar.
CNN reported first on Tuesday, citing an unidentified United States official, saying that Washington is closely monitoring intelligence. The unnamed official says Kim is in grave danger after his surgery. South Korean market is facing a severe decline. It is evident with Kospi closing 1% lower daily and Kosdaq index ending the day 1.42% lower. Victex, a well-known defense firm, records a 23.76% hike in shares. On the other hand, North Korea exposes current stoke. Hyundai Elevator, as well as Hanil Hyundai Cement, drops by 4.7% and 2.48%, respectively.
Korean President Kim Jong Un is seriously ill
According to reports, Kim did not attend the celebration of his grandfathers’ birthday, which took place on 15th April. Kim’s absence inspires many to raise questions about his health status. There is still confusion over the condition of Kim’s wellbeing. CNN reports that a few saw Jong four days prior at a government meeting.
However, the South Korea presidential office enlightened NBC News on the situation. The office says that they have no permission to detect evidence to hold up gossips about Kim’s health. Besides, they are confident that Chairman Kim Jong is touring provincial areas with his close supporters.
Despite North Korea’s Worker’s party, cabinet and military showing unusual movements such as emergency degree, the office believes that Kim is active as before. Besides, RushHourDaily also cited two government sources, saying that Kim was not seriously sick.
Kim’s whereabouts and effect on the market
Earlier on, RushHourDaily quoted a South Korean Media website, Daily NK. The News giant speculates that Kim is receiving treatment after going through a cardiovascular surgery on 12th April. However, the report quotes unnamed sources within the reclusive organization. On Tuesday, Adarsh Sinha, one of the securities’ at Bank of America, talks to CNBC.
Adarsh says the uncertainty of the situation and impending new regime is extensively affecting the markets. Sinha also states that the foreign exchange rates are high enough to weaken the currency. Up to date, Sinha is the co-executive of Asia rates as well as foreign exchange strategy at Bank of America. For that reason, Adarsh is confident that the price in higher risk premium is weakening Korean won.
Conclusion
Many other currencies in Asia are also affected by the same. For instance, onshore Chinese yuan declined by 0.13%, closing at 7.0814 per dollar. Similarly, its offshore counterpart is trading at 7.0955 per dollar.
The Singapore dollar has also recorded a 0.3% decline, closing at 1.4251 against the greenback. Besides, Sinha recommends sorting of the foreign exchange issue and think about the details later. In my opinion, it is a wise choice to solve the market situation first.
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