Higher won dents small exporters’ biz sentiment

Almost nine out of 10 of the country’s small and medium-sized enterprises believe the rising local currency against the U.S. dollar will result in a weaker bottom line, data showed Saturday.

According to a survey of 112 local SMEs by the Korea Federation of Small and Medium Business, 88.2 percent replied the higher won will have an adverse impact on their earnings.

The local currency closed at 1,092.20 won against the greenback on Friday, remaining below the 1,100 won mark since Oct. 25, when the won breached the level for the first time since Sept. 9, 2011.

A stronger won inflicts foreign exchange losses on exporters, making South Korean goods more expensive overseas, which damages local firms’ export earnings.

Market watchers said the break-even point of the won-dollar rate is 1,070.49 won, while the appropriate level stands at 1,138.21 won for SMEs.

“A certain level of measure is needed to be taken against the appreciation of the local currency to the extent it does not hurt the free market system,” an official from the federation said.

Meanwhile, 45.5 percent of the companies responded that the government should focus on stabilizing the volatile foreign exchange market in order to beef up the country’s exports.

In addition, 37.1 percent said South Korea should support exporters’ overseas push to new markets around the globe. (Yonhap News)