SEOUL, Oct. 28 (Xinhua) -- An appreciation of the South Korean currency against the U.S. dollar by 10 won is estimated to bring about a plunge in South Korea's exports, deteriorating the nation's trade competitiveness, a report by South Korea's biggest lobby group said Wednesday.

    According to the report by the Federation of Korean Industries, South Korea's 30 largest business groups will see their exports plummet by 800 billion won (672 million U.S. dollars) in the fourth quarter if the won-dollar exchange rate falls 10 won compared to the third quarter.

    If the exchange rate for the October-December period hits 1,170won against the U.S. dollar on average, the export amount will decrease 5.7 trillion won (4.8 trillion U.S. dollars) from the third quarter when the average rate scored 1,240.9 won to the greenback.

    The report also pointed that a fall in the currency exchange rate will pull up the average cost for exports, which will in turn exacerbate South Korean firms' price competitiveness.

    As the U.S. dollar is the settlement currency for most South Korean exporters, even a marginal change in the currency exchange rate has a grand impact on the competitiveness of the nation's export items, the report added.

    However, the 30 business groups are to see a foreign exchange translation gain if the South Korean won strengthens in the fourth quarter, according to the report.

    As the business groups possess about four-times more debts denominated in foreign currency than assets of the same kind, they are expected to mark a foreign exchange translation gain worth 1 trillion won (840 million U.S. dollars) if the average foreign exchange rate hits 1,170 won to the U.S. dollar, the report added.

    The report urged the South Korean government to secure a greater amount of foreign reserves for the long term and called on firms to diversify settlement currencies and to beef up their control on foreign exchange risk.

    The local currency closed at 1,195.4 won against the U.S. dollar on Wednesday, up 11 won from Tuesday.

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