ID :
22356
Thu, 10/02/2008 - 15:39
Auther :
Shortlink :
http://m.oananews.org//node/22356
The shortlink copeid
S. Korean currency plunges to 65-month low
SEOUL, Oct. 2 (Yonhap) -- The South Korean currency tumbled to a 65-month low against the U.S. dollar on Thursday as uncertainty over a global credit crunch deepened worries over foreign currency liquidity, dealers said.
The local currency closed at 1,223.5 won to the dollar, down 36.5 won from
Wednesday's close and the lowest level since April 25, 2003 when it finished at
1,237.8 won against the greenback. The won has lost more than 23 percent versus
the dollar so far this year, putting upward pressure on already-high inflation.
"The won's plunge came amid growing uncertainty over global financial markets.
Despite the passage of the U.S. bailout bill in the Senate, more hurdles remain
down the road," said Shin Jin-ho, a currency analyst at Woori Futures. "Mounting
concerns that a global credit crunch will hurt the real economy also prompted
investors to shun riskier assets."
The U.S. Senate passed a revised $700 billion financial sector bailout bill on
Wednesday (local time), after the House of Representatives unexpectedly rejected
an original version of the rescue package Monday, sending global stock markets
tumbling.
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.
The won's weakness also came amid falling stock prices. South Korea's key stock
index fell 1.39 percent to 1,419.65. Offshore investors unloaded a net 319.3
billion won ($260.9 million) worth of local stocks on the Seoul bourse.
South Korea's central bank said earlier in the day that the foreign exchange
reserves reached $239.7 billion as of the end of September, down $3.53 billion
from a month earlier and marking a decline for the sixth straight month.
Shin, however, said there is a low possibility of government intervention
reversing the won's downtrend as several factors, including the nation's
continued current account deficit, are likely to boost dollar demand.
The local currency closed at 1,223.5 won to the dollar, down 36.5 won from
Wednesday's close and the lowest level since April 25, 2003 when it finished at
1,237.8 won against the greenback. The won has lost more than 23 percent versus
the dollar so far this year, putting upward pressure on already-high inflation.
"The won's plunge came amid growing uncertainty over global financial markets.
Despite the passage of the U.S. bailout bill in the Senate, more hurdles remain
down the road," said Shin Jin-ho, a currency analyst at Woori Futures. "Mounting
concerns that a global credit crunch will hurt the real economy also prompted
investors to shun riskier assets."
The U.S. Senate passed a revised $700 billion financial sector bailout bill on
Wednesday (local time), after the House of Representatives unexpectedly rejected
an original version of the rescue package Monday, sending global stock markets
tumbling.
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.
The won's weakness also came amid falling stock prices. South Korea's key stock
index fell 1.39 percent to 1,419.65. Offshore investors unloaded a net 319.3
billion won ($260.9 million) worth of local stocks on the Seoul bourse.
South Korea's central bank said earlier in the day that the foreign exchange
reserves reached $239.7 billion as of the end of September, down $3.53 billion
from a month earlier and marking a decline for the sixth straight month.
Shin, however, said there is a low possibility of government intervention
reversing the won's downtrend as several factors, including the nation's
continued current account deficit, are likely to boost dollar demand.
