ID :
22088
Wed, 10/01/2008 - 16:23
Auther :
Shortlink :
https://www.oananews.org//node/22088
The shortlink copeid
S. Korean currency plunges to 64-month low on U.S. bailout rejection
SEOUL, Sept. 30 (Yonhap) -- The South Korean currency tumbled to a 64-month low against the U.S. dollar on Tuesday, spooked by the U.S. Congress' rejection of an emergency rescue plan many observers expect would have saved staggering global financial markets, dealers said.
The local currency closed at 1,207 won to the dollar, down 18.2 won from Monday's
close and the lowest level since May 29, 2003, when it finished at 1,207 won
against the greenback. The won has lost more than 22 percent versus the dollar so
far this year, putting upward pressure on already-high inflation.
"There is no favorable news coming from either home or abroad," said Shin Jin-ho,
a currency analyst at Woori Futures. "The failure to approve the bail-out
package, falling stock markets, and rising interest rates in short-term capital
markets are all contributing to intensifying jitters, putting downward pressure
on the already-sliding local currency."
On Monday, the U.S. House of Representatives turned down the government-led
US$700 billion emergency rescue proposal designed to buy bad debts from financial
institutions. The decision sent shock waves across the globe, raising fears that
instability in the financial sector could cascade into the real economy.
The won tumbled to a session low of 1,230 won at one point, but as the local
stock market trimmed earlier sharp falls, the local currency also pared heavy
losses, dealers said. South Korea's key stock index closed down 0.57 percent to
1,448.06 after falling more than 5 percent.
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.
"The ballooning deficit in the nation's current account for August also played a
part in the won's decline," Shin said.
Earlier in the day, the Bank of Korea, the country's central bank, said the
nation's current account shortfalls in August reached $4.71 billion, brining its
cumulative loss in the January-August period to $12.6 billion.
Finance Minister Kang Man-soo said Tuesday that South Korea's response to the
U.S. failure to endorse the rescue plan is far too "sensitive," and the
government here will take "necessary" measures to ease concerns over liquidity in
the foreign currency market.
But analysts said the won would face downward pressure as ongoing global
financial jitters would prompt investors to rush to the safer greenback.
"Dollar supply is insufficient in the local market. As the won fell to the
1,200-won mark versus the dollar, it may gain some ground as a result of a
technical rebound, but the local currency is likely to test the 1,240-won mark in
the short term," said Jeon Seung-ji, a currency analyst at Samsung Futures Inc.
sooyeon@yna.co.kr
(END)
The local currency closed at 1,207 won to the dollar, down 18.2 won from Monday's
close and the lowest level since May 29, 2003, when it finished at 1,207 won
against the greenback. The won has lost more than 22 percent versus the dollar so
far this year, putting upward pressure on already-high inflation.
"There is no favorable news coming from either home or abroad," said Shin Jin-ho,
a currency analyst at Woori Futures. "The failure to approve the bail-out
package, falling stock markets, and rising interest rates in short-term capital
markets are all contributing to intensifying jitters, putting downward pressure
on the already-sliding local currency."
On Monday, the U.S. House of Representatives turned down the government-led
US$700 billion emergency rescue proposal designed to buy bad debts from financial
institutions. The decision sent shock waves across the globe, raising fears that
instability in the financial sector could cascade into the real economy.
The won tumbled to a session low of 1,230 won at one point, but as the local
stock market trimmed earlier sharp falls, the local currency also pared heavy
losses, dealers said. South Korea's key stock index closed down 0.57 percent to
1,448.06 after falling more than 5 percent.
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.
"The ballooning deficit in the nation's current account for August also played a
part in the won's decline," Shin said.
Earlier in the day, the Bank of Korea, the country's central bank, said the
nation's current account shortfalls in August reached $4.71 billion, brining its
cumulative loss in the January-August period to $12.6 billion.
Finance Minister Kang Man-soo said Tuesday that South Korea's response to the
U.S. failure to endorse the rescue plan is far too "sensitive," and the
government here will take "necessary" measures to ease concerns over liquidity in
the foreign currency market.
But analysts said the won would face downward pressure as ongoing global
financial jitters would prompt investors to rush to the safer greenback.
"Dollar supply is insufficient in the local market. As the won fell to the
1,200-won mark versus the dollar, it may gain some ground as a result of a
technical rebound, but the local currency is likely to test the 1,240-won mark in
the short term," said Jeon Seung-ji, a currency analyst at Samsung Futures Inc.
sooyeon@yna.co.kr
(END)
