S. Korean currency dips 1.63 pct against dollar

SEOUL, Feb. 16 (Yonhap) -- The South Korean currency fell 1.63 percent against
the U.S. dollar on Monday as investors were spooked by escalating worries about a
fresh North Korean missile threat and a deepening economic slump, dealers said.

The local currency closed at 1,427.5 won to the greenback, down 23.3 won from the
previous session's close, marking the fifth straight day of decline.
"Investor sentiment was chilled by news that North Korea seems to be assembling a
long-range missile," said Jeon Seung-ji, a currency analyst at Samsung Futures
Inc. "Offshore investors' dollar buying was strong."
Geopolitical tensions were renewed amid reports that North Korea appears to be
moving a long-range missile to its launch site on the country's east coast.
The Korean won declined to the 1,400 level against the dollar for the first time
in about two months on Thursday after plunging as much as 25.7 percent last year.

Analysts say the local currency is likely to be under downward pressure for the
time being, though the pace of decline is not likely to be as steep as that of
last year.
"The won is expected to lose ground as the local economy is rapidly heading into
a recession and uncertainties surrounding corporate bankruptcies linger," Jeon
said, adding that the won may trade between 1,390 and 1,450 won this week.
Finance Minister Yoon Jeung-hyun, who took office on Tuesday, warned last week
that the Korean economy will likely shrink 2 percent this year, the first annual
contraction since the 1997-98 Asian financial crisis.
sooyeon@yna.co.kr
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