(News Focus) Iran crisis sharply weakens Korean won, fueling inflation, economic fallout concerns | Yonhap News Agency

## Summary
OK By Oh Seok-min SEOUL, March 16 (Yonhap) -- The South Korean won's slide to a 17-year low Monday has further raised concerns of inflation and broader economic fallout, with analysts warning that the currency could remain trapped under the critical 1,500 won-per-dollar level for some time if the Middle East crisis persists and global oil prices remain high. Travelers visit a currency exchange booth in Myeongdong, Seoul, on March 15, 2026. (Yonhap) The won's weakness came as the Middle East conflict has pushed up global oil prices amid supply disruptions and reinforced the broader strength of the dollar amid risk-off sentiment. South Korea depends on imports for about 98 percent of its fossil fuels and sources roughly 70 percent of its crude oil from the Middle East, according to industry and government data. "The surge in global oil prices has heightened inflation concerns, boosting demand for safe-haven assets and strengthening the dollar," Park Hyung-joong, an economist at Woori Bank, said. "The Iran crisis is increasingly likely to last longer than expected, and the won may continue to fluctuate around the 1,500 won range if such structural pressures persist," he added. Officials work at a dealing room of Hana Bank in Seoul on March 16, 2026. (Yonhap) graceoh@yna.co.kr (END) Related Articles (LEAD) Korean currency slips past 1,500 won per dollar for 1st time in 17 yrs amid Middle East crisis Finance minister says verbal intervention possible over sharp won decline (2nd LD) Trump calls on S, Korea, China, Japan, others to send ships to keep Hormuz Strait open Ruling party, gov't agree to submit extra budget bill by end-March Gov't designates 23 necessities for special price monitoring amid Middle East crisis Keywords #Strait of Hormuz #Middle East crisis Articles with issue keywords Most Liked (News Focus) USFK's relocation of military assets to Middle East raises concerns about Seoul's capability to deter N.K. threats 16th Gwangju Biennale: You must change your life BTS expands Gwanghwamun concert capacity to 22,000 with added standing zones BTS to launch 'Arirang' pop-ups to mark new album release Police vow zero tolerance for terror threats against BTS comeback concert Most Saved 16th Gwangju Biennale: You must change your life (2nd LD) N.

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OK
By Oh Seok-min
SEOUL, March 16 (Yonhap) -- The South Korean won's slide to a 17-year low Monday has further raised concerns of inflation and broader economic fallout, with analysts warning that the currency could remain trapped under the critical 1,500 won-per-dollar level for some time if the Middle East crisis persists and global oil prices remain high.
The won opened at 1,501 per dollar Monday, down 7.3 won from the previous session, breaching the 1,500 won mark in intraday trading for the first time since March 12, 2009, when the country was reeling from the global financial crisis.
The won had depreciated 3.84 percent against the greenback since the start of the month through Saturday following the U.S.-Israeli strike on Iran, recording a steeper drop than other major Asian currencies. The Japanese yen and Chinese yuan have fallen 2.39 percent and 0.79 percent, respectively.
Travelers visit a currency exchange booth in Myeongdong, Seoul, on March 15, 2026. (Yonhap)
The won's weakness came as the Middle East conflict has pushed up global oil prices amid supply disruptions and reinforced the broader strength of the dollar amid risk-off sentiment.
Brent Crude, the global benchmark, surged to a multiyear high of more than $106 a barrel Sunday (U.S. time) as the Strait of Hormuz has been effectively shut since the beginning of the crisis. Around 20 percent of the world's oil and gas supply passes through the strategic waterway.
Higher oil prices tend to weigh particularly heavily on the won as they increase South Korea's demand for dollars to pay for crude imports. South Korea depends on imports for about 98 percent of its fossil fuels and sources roughly 70 percent of its crude oil from the Middle East, according to industry and government data.
"The surge in global oil prices has heightened inflation concerns, boosting demand for safe-haven assets and strengthening the dollar," Park Hyung-joong, an economist at Woori Bank, said.
"The Iran crisis is increasingly likely to last longer than expected, and the won may continue to fluctuate around the 1,500 won range if such structural pressures persist," he added.
Foreign outflows from the local stock market have also weighed on the currency.
Offshore investors have dumped about 13 trillion won (US$8.69 billion) worth of Korean stocks during the first half of this month following a record monthly net sale of 21 trillion won in February, data from the Bank of Korea (BOK) showed.
This AFP photo, taken March 11, 2026, and released by the Royal Thai Navy, shows smoke rising from the Thai bulk carrier Mayuree Naree near the Strait of Hormuz after an attack. (PHOTO NOT FOR SALE) (Yonhap)
A weaker won has heightened inflationary pressure and could dampen economic growth momentum, stoking fears of stagflation in which high inflation and stagnant economic growth occur simultaneously.
According to a BOK analysis, a 10 percent annual increase in global oil prices is estimated to push consumer inflation higher by up to 0.2 percentage point.
The central bank forecasts the economy to grow 2 percent in 2026 while projecting consumer inflation to expand 2.1 percent. Those projections assume that Brent crude will average around $64 per barrel this year.
While a weaker won could improve price competitiveness for exporters in global markets, a persistently weak currency also raises costs for companies and squeezes profit margins given the country's heavy reliance on imported energy, raw materials and industrial components.
"Rising oil prices would dampen global trade and disrupt logistics, posing challenges for exporters. They could shrink the country's current account surplus and add further downward pressure on the won," Lee Min-hyuk, an economist at KB Kookmin Bank, said.
Steep inflation may also weaken consumer sentiment, raising concerns that expectations for a recovery in domestic demand and investment could fade.
"Even if the conflict winds down, it would be difficult to return to the conditions seen in February soon, as energy supply chains are unlikely to normalize rapidly," Baek Seok-hyun, an economist at Shinhan Bank, said.
Prices are listed at a gas station in Seoul on March 15, 2026. South Korea implemented a temporary cap system on March 13 as part of the government's efforts to ease soaring fuel prices and reduce the burden on consumers, setting maximum prices for products oil refineries supply to gas stations and distributors. (Yonhap)
The government has been scrambling to stabilize the foreign exchange market and minimize the impact of the crisis on the economy and the people's livelihoods.
On Saturday, Finance Minister Koo Yun-cheol and his Japanese counterpart, Satsuki Katayama, expressed "serious concerns" over sharp currency declines in a joint document adopted after their ministerial meeting in Tokyo and agreed to coordinate responses to ease market volatility.
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## Expert Analysis

### Merits
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### Areas for Consideration
- Travelers visit a currency exchange booth in Myeongdong, Seoul, on March 15, 2026. (Yonhap) The won's weakness came as the Middle East conflict has pushed up global oil prices amid supply disruptions and reinforced the broader strength of the dollar amid risk-off sentiment.
- Steep inflation may also weaken consumer sentiment, raising concerns that expectations for a recovery in domestic demand and investment could fade. "Even if the conflict winds down, it would be difficult to return to the conditions seen in February soon, as energy supply chains are unlikely to normalize rapidly," Baek Seok-hyun, an economist at Shinhan Bank, said.
- Officials work at a dealing room of Hana Bank in Seoul on March 16, 2026. (Yonhap) graceoh@yna.co.kr (END) Related Articles (LEAD) Korean currency slips past 1,500 won per dollar for 1st time in 17 yrs amid Middle East crisis Finance minister says verbal intervention possible over sharp won decline (2nd LD) Trump calls on S, Korea, China, Japan, others to send ships to keep Hormuz Strait open Ruling party, gov't agree to submit extra budget bill by end-March Gov't designates 23 necessities for special price monitoring amid Middle East crisis Keywords #Strait of Hormuz #Middle East crisis Articles with issue keywords Most Liked (News Focus) USFK's relocation of military assets to Middle East raises concerns about Seoul's capability to deter N.K. threats 16th Gwangju Biennale: You must change your life BTS expands Gwanghwamun concert capacity to 22,000 with added standing zones BTS to launch 'Arirang' pop-ups to mark new album release Police vow zero tolerance for terror threats against BTS comeback concert Most Saved 16th Gwangju Biennale: You must change your life (2nd LD) N.

### Implications
- OK By Oh Seok-min SEOUL, March 16 (Yonhap) -- The South Korean won's slide to a 17-year low Monday has further raised concerns of inflation and broader economic fallout, with analysts warning that the currency could remain trapped under the critical 1,500 won-per-dollar level for some time if the Middle East crisis persists and global oil prices remain high.
- South Korea depends on imports for about 98 percent of its fossil fuels and sources roughly 70 percent of its crude oil from the Middle East, according to industry and government data. "The surge in global oil prices has heightened inflation concerns, boosting demand for safe-haven assets and strengthening the dollar," Park Hyung-joong, an economist at Woori Bank, said. "The Iran crisis is increasingly likely to last longer than expected, and the won may continue to fluctuate around the 1,500 won range if such structural pressures persist," he added.
- This AFP photo, taken March 11, 2026, and released by the Royal Thai Navy, shows smoke rising from the Thai bulk carrier Mayuree Naree near the Strait of Hormuz after an attack. (PHOTO NOT FOR SALE) (Yonhap) A weaker won has heightened inflationary pressure and could dampen economic growth momentum, stoking fears of stagflation in which high inflation and stagnant economic growth occur simultaneously.
- Those projections assume that Brent crude will average around $64 per barrel this year.

### Expert Commentary
This article covers won, korea, crisis topics. Areas of concern are also raised. Readability: Flesch-Kincaid grade 0.0. Word count: 1281.