ID :
22066
Wed, 10/01/2008 - 15:49
Auther :
Shortlink :
http://m.oananews.org//node/22066
The shortlink copeid
S. Korean currency rises against U.S. dollar on U.S. bailout hopes
SEOUL, Oct. 1 (Yonhap) -- The South Korean currency rebounded from a 64-month low against the U.S. dollar on Wednesday on revived hopes that U.S. lawmakers will salvage a rejected bailout plan for the troubled financial sector, dealers said.
The local currency closed at 1,187 won to the dollar, up 20 won from Tuesday's
close and the first gain in eight sessions. The won has lost about 21 percent
versus the dollar so far this year, putting upward pressure on already-high
inflation.
"Growing prospects for the U.S. rescue plan eased investor's rush to the safer
greenback. In addition, local companies' dollar demand to cover end of the month
bills also abated," said Jeon Seung-ji, a currency analyst at Samsung Futures
Inc.
The U.S. Senate agreed to vote on Wednesday night (local time) on the US$700
billion bailout plan, raising hopes for its passage.
On Monday, the U.S. House of Representatives turned down the government-led
emergency rescue proposal designed to buy bad debts from financial institutions.
The decision sent shock waves across the globe on Tuesday, raising fears that
instability in the financial sector could cascade into the real economy.
Earlier in the day, a senior finance ministry official said the volatility of
South Korea's currency market is expected to ease on falling oil prices, which
would have a positive impact on the nation's current account balance.
"With international crude oil prices going down, the current account balance for
October will likely turn around, helping to stabilize the local currency market,"
Vice Finance Minister Bae Kook-hwan told a local radio program.
South Korea's currency market has been suffering from a dollar shortage, as banks
and companies are rushing to the safer greenback on concerns over a financial
crisis sparked by the collapse of investment giant Lehman Brothers Holdings Inc.
A widening shortfall of the current account, coupled with rising overseas debt
and a selling spree of local stocks by foreign investors, is putting downward
pressure on the already-weakening local currency.
"I expect the U.S. bailout proposal to be passed in the Congress, but the local
currency will be under downward pressure versus the dollar as there are lingering
uncertainties at home and abroad, such as a dollar shortage in the local capital
market," Jeon added.
sooyeon@yna.co.kr
(END)
The local currency closed at 1,187 won to the dollar, up 20 won from Tuesday's
close and the first gain in eight sessions. The won has lost about 21 percent
versus the dollar so far this year, putting upward pressure on already-high
inflation.
"Growing prospects for the U.S. rescue plan eased investor's rush to the safer
greenback. In addition, local companies' dollar demand to cover end of the month
bills also abated," said Jeon Seung-ji, a currency analyst at Samsung Futures
Inc.
The U.S. Senate agreed to vote on Wednesday night (local time) on the US$700
billion bailout plan, raising hopes for its passage.
On Monday, the U.S. House of Representatives turned down the government-led
emergency rescue proposal designed to buy bad debts from financial institutions.
The decision sent shock waves across the globe on Tuesday, raising fears that
instability in the financial sector could cascade into the real economy.
Earlier in the day, a senior finance ministry official said the volatility of
South Korea's currency market is expected to ease on falling oil prices, which
would have a positive impact on the nation's current account balance.
"With international crude oil prices going down, the current account balance for
October will likely turn around, helping to stabilize the local currency market,"
Vice Finance Minister Bae Kook-hwan told a local radio program.
South Korea's currency market has been suffering from a dollar shortage, as banks
and companies are rushing to the safer greenback on concerns over a financial
crisis sparked by the collapse of investment giant Lehman Brothers Holdings Inc.
A widening shortfall of the current account, coupled with rising overseas debt
and a selling spree of local stocks by foreign investors, is putting downward
pressure on the already-weakening local currency.
"I expect the U.S. bailout proposal to be passed in the Congress, but the local
currency will be under downward pressure versus the dollar as there are lingering
uncertainties at home and abroad, such as a dollar shortage in the local capital
market," Jeon added.
sooyeon@yna.co.kr
(END)
