The financial crisis in South Korea has worsened dramatically, with the currency, the Won, plunging fifteen percent in value in early trading, to reach its lowest ever level against the dollar at nearly two thousand.

As panic returned to the markets, share prices also fell by more than seven percent.

The BBC correspondent in Seoul says there seems to be no end in sight to the collapse of the currency, amid a continuing scramble for dollars to pay off the massive debts accumulated by South Korean industrial groups.

There are also persistant fears that the country could default on its short-term foreign debts.

The latest turmoil was brought on by a further downgrading of South Korea's credit rating which reduced its debt to junk bond status.

Similar downgrading of other Asian credit ratings also put pressure on the Malaysian, Thai, Indonesian and Taiwan currencies.

From the newsroom of the BBC World Service
 

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