ID :
38050
Tue, 12/30/2008 - 15:00
Auther :
Shortlink :
http://m.oananews.org//node/38050
The shortlink copeid
S. Korean currency edges up after dismal year
SEOUL, Dec. 30 (Yonhap) -- The South Korean currency ended a disastrous year with a slight gain against the U.S. dollar on Tuesday, as foreign exchange authorities supposedly stepped in to boost the won's year-end value, dealers said.
The local currency closed at 1,259.50 won to the greenback, up 3.5 won from
Monday's close, after jumping as high as 1,246 won at one point. It was the won's
fourth consecutive session of gain.
Hit by the U.S.-sparked global financial crisis, the Korean won has plunged 25.7
percent to the dollar so far this year, becoming one of the world's
worst-performing currencies.
The local currency suffered its steepest loss in 11 years because of a ballooning
current account deficit, rising overseas debt and foreign investors' stock
sell-offs.
"The foreign exchange authorities seemed to make efforts to stem the won's
weakness. As suspected intervention and dollar demand to cover month-end import
bills were in balance, the local currency was trading at the 1,250-won range per
the greenback throughout the session," said Jeon Seung-ji, a currency analyst at
Samsung Futures Inc.
The news that South Korea posted a current account surplus for the second
straight month in November lent some support to the local currency, analysts say.
The current account surplus reached US$2.06 billion in November, down from a
revised record $4.75 billion surplus the previous month, according to the central
bank.
Local banks and firms had been monitoring the won's movement as their foreign
currency denominated assets and debts will be assessed in accordance with the
won's average value on the last trading day of the year.
South Korea's smaller firms have also been suffering from losses related to
currency options known as "knock-in knock-out (KIKO)" contracts, as the won's
steep decline against the dollar have led to snowballing losses.
Local banks are struggling to bolster their falling capital adequacy ratios, a
key barometer of financial health, as the slowing economy and a credit crunch
have increased the amount of bad debt.
Despite the won's recent winning streak, analysts say it could continue to weaken
until the first half of next year as worries over the global economy and a
funding squeeze at local banks persist.
"The local currency may undergo volatile trading until the first six months of
next year amid the deepening global slump," said Shin Jin-ho, a currency analyst
at Woori Futures Co.
Meanwhile, the nation's financial watchdog said before market closing that it is
investigating allegations that some companies and individuals are hoarding the
greenback.
sooyeon@yna.co.kr
(END)
The local currency closed at 1,259.50 won to the greenback, up 3.5 won from
Monday's close, after jumping as high as 1,246 won at one point. It was the won's
fourth consecutive session of gain.
Hit by the U.S.-sparked global financial crisis, the Korean won has plunged 25.7
percent to the dollar so far this year, becoming one of the world's
worst-performing currencies.
The local currency suffered its steepest loss in 11 years because of a ballooning
current account deficit, rising overseas debt and foreign investors' stock
sell-offs.
"The foreign exchange authorities seemed to make efforts to stem the won's
weakness. As suspected intervention and dollar demand to cover month-end import
bills were in balance, the local currency was trading at the 1,250-won range per
the greenback throughout the session," said Jeon Seung-ji, a currency analyst at
Samsung Futures Inc.
The news that South Korea posted a current account surplus for the second
straight month in November lent some support to the local currency, analysts say.
The current account surplus reached US$2.06 billion in November, down from a
revised record $4.75 billion surplus the previous month, according to the central
bank.
Local banks and firms had been monitoring the won's movement as their foreign
currency denominated assets and debts will be assessed in accordance with the
won's average value on the last trading day of the year.
South Korea's smaller firms have also been suffering from losses related to
currency options known as "knock-in knock-out (KIKO)" contracts, as the won's
steep decline against the dollar have led to snowballing losses.
Local banks are struggling to bolster their falling capital adequacy ratios, a
key barometer of financial health, as the slowing economy and a credit crunch
have increased the amount of bad debt.
Despite the won's recent winning streak, analysts say it could continue to weaken
until the first half of next year as worries over the global economy and a
funding squeeze at local banks persist.
"The local currency may undergo volatile trading until the first six months of
next year amid the deepening global slump," said Shin Jin-ho, a currency analyst
at Woori Futures Co.
Meanwhile, the nation's financial watchdog said before market closing that it is
investigating allegations that some companies and individuals are hoarding the
greenback.
sooyeon@yna.co.kr
(END)
