South Korean won down on gloomy export forecasts
Reuters - Friday, January 2
SEOUL, Jan 2 - The South Korean won fell more than 5 percent against the dollar on Friday as the government provided a grim export forecast for this year and on expectations for less dollar-selling intervention from the authorities.
Earlier, the country said its overseas sales in 2009 would probably grow only 1.0 percent, marking the slowest pace in eight years, with December's exports falling more than expected. [ID:nSEV000566]
The won was quoted at 1,314.9/0.1 per dollar as of 0230 GMT, compared with Wednesday's domestic close <KRW=KFTC> of 1,259.5. The local currency <KRW=> slid to as low as 1,330.9, its weakest since Dec. 24, 2008.
"The won has not fully reflected the dark outlook of weak exports due to intervention around the end of last year. The unit is likely to be under pressure during the first quarter, given a steep economic slowdown and worries about corporate restructuring," said Park Sang-hyun, the chief economist at HI Investment & Securities.
Foreign exchange authorities are expected to scale back dollar sales to support the won after local companies closed their books for 2008 and on concerns over falling foreign exchange reserves, analysts said.
The authorities had been selling dollars to help local companies reduce losses linked to foreign exchange derivatives and foreign currency debts when they close their books for last year, traders said.
Seoul shares <.KS11> rose 1.10 percent as foreign investors bought a net 6.9 billion won worth of stocks in the country's main exchange.
Foreigners sold a combined net 33.6 trillion won in shares, the biggest annual net sales, last year, pushing down the won.
0230 GMT prev close Won <KRW=> 1,314.9/0.1 1,259.5 Yen/won <JPYKRW=R> 14.4781/71 13.9654/49 KOSPI <.KS11> 1,136.88 1,124.47
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