S. Korean Currency Falls Below 1,500

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S. Korean Currency Falls Below 1,500


The South Korean won tumbled to a three-month low against the U.S. dollar Friday as renewed concerns over a credit crisis prompted foreigners to dump local shares.

The local currency closed at 1,506 won to the greenback, down 25 won from Thursday's close, marking the ninth straight day of decline. It was the first time since late November that the won has breached the 1,500 mark.

The Korean currency dipped as low as 1,515 won at one point with its value falling 16.4 percent against the dollar so far this year.

"Once the Korean currency breached the 1,500-won level, investors bet on the won's further losses, sparking strong dollar demand," Jeon Seung-ji, a currency analyst at Samsung Futures, was quoted as saying by Yonhap News. "Rising default risks in eastern European countries and concerns over squeezed money markets added to market jitters."

The won's tumble came as foreign investors dumped local shares in pursuit of safer assets amid a looming credit crisis. The country's key stock index plunged 3.72 percent to 1,065.95. Offshore investors sold a net 359 billion won ($238.5 million) worth of local stocks on the main bourse.

Reports that Asian countries may increase an $80 billion joint fund created to help tackle a regional crisis in the wake of the 1997-98 financial meltdown to $120 billion did little to ease market instability, experts say.

Market jitters have deepened over a chunk of foreign currency-denominated bonds set to mature in March, with fears that banks will not be able to pay back the debts amid a dollar shortage.

Experts say the local currency will be under downward pressure for the time being, given the depth of the economic slump and a subsequent corporate restructuring drive.

Jeon at Samsung Futures said that dollar demand will be strong in March when foreigners will begin to repatriate dividends to their home countries.

[miri]

...it's good use for ppl living in the us... bad news for ppl living in korea huh x_x...

[anahigin]

Not really surprising as I've noticed that most of the currencies around the world are unstable because of the Dollar rising.