Business sentiment among South Korean companies worsened to the five-month low as the continued appreciation of the local currency against the U.S. dollar boosted concerns over corporate profitability, a business lobby survey showed Tuesday.
Business survey index (BSI) for December, a gauge of business environment outlook for the upcoming month, fell to 92.6 from 94.7 in November, according to the Federation of Korean Industries (KFI) . It was based on the survey response from the country's 600 largest firms by sales.
The figure continued to slide after peaking at 101.1 in October, staying below the benchmark of 100 for two straight months. A reading below 100 means pessimists outnumber optimists.
The dimmer outlook came as the South Korean won's continued ascent to the greenback raised concerns over the worsening of profitability.
The won/dollar exchange rate declined to 1,056.4 won on Nov. 19, nearing to this year's low of 1,054.3 won. The won surged to the highest in around five years against the Japanese yen on Nov. 22.
Kim Yong-ok, head of FKI's economic policy team, said that the won/dollar exchange rate already fell below the breakeven rate of 1,066.4 won, expressing concerns over the worsening profitability of large exporters./.