ID :
46433
Thu, 02/19/2009 - 17:55
Auther :
Shortlink :
https://www.oananews.org//node/46433
The shortlink copeid
Korean currency hits 3-month low amid liquidity concerns
SEOUL, Feb. 19 (Yonhap) -- South Korea's currency declined to a three-month low against the U.S. dollar on Thursday as market jitters escalated over local banks' dollar liquidity conditions, dealers said.
The local currency closed at 1,481 won to the greenback, down 13 won, or 0.88
percent, from the previous session's close, marking the eighth straight day of
decline. The Korean currency reached its lowest level since Nov. 25, 2008.
The currency dipped as low as 1,483 won at one point with its value falling 15
percent against the dollar so far this year.
"Investors' appetite for riskier assets declined amid concerns over local banks'
dollar shortages and a set of downbeat overseas news like teetering banks in
Eastern Europe," said Jeon Seung-ji, a currency analyst at Samsung Futures Inc.
Speculation that local lenders may not be able to repay foreign debts due in
March amid a dollar shortage has grown rampant, stoking worries the banking
sector could slip into a fresh credit crisis.
The Bank of Korea (BOK) said that local banks have a combined US$10.4 billion in
foreign debts maturing in February and March, adding the country can tackle the
repayment burdens given its foreign exchange reserves totaling $201.74 billion.
BOK Gov. Lee Seong-tae also brushed off rumors of a so-called March financial
crisis, saying there is only a slim possibility that Japanese financial firms
will pull their money out of the local market en masse in March when they close
their books.
Analysts said market jitters increased on worries that foreign exchange
authorities may not have enough room to defend the won as a $200 billion foreign
reserve stockpile is widely seen as a psychological support level. The BOK has
tapped more than half of a $30 billion currency swap line with the U.S.
"As economic and financial uncertainty lingers, it seems that the authorities may
have difficulty in aggressively stepping in the market down the road," Jeon said,
adding that the local currency will be under downward pressure given the sharply
slowing economy and rising corporate default risks.
The local currency closed at 1,481 won to the greenback, down 13 won, or 0.88
percent, from the previous session's close, marking the eighth straight day of
decline. The Korean currency reached its lowest level since Nov. 25, 2008.
The currency dipped as low as 1,483 won at one point with its value falling 15
percent against the dollar so far this year.
"Investors' appetite for riskier assets declined amid concerns over local banks'
dollar shortages and a set of downbeat overseas news like teetering banks in
Eastern Europe," said Jeon Seung-ji, a currency analyst at Samsung Futures Inc.
Speculation that local lenders may not be able to repay foreign debts due in
March amid a dollar shortage has grown rampant, stoking worries the banking
sector could slip into a fresh credit crisis.
The Bank of Korea (BOK) said that local banks have a combined US$10.4 billion in
foreign debts maturing in February and March, adding the country can tackle the
repayment burdens given its foreign exchange reserves totaling $201.74 billion.
BOK Gov. Lee Seong-tae also brushed off rumors of a so-called March financial
crisis, saying there is only a slim possibility that Japanese financial firms
will pull their money out of the local market en masse in March when they close
their books.
Analysts said market jitters increased on worries that foreign exchange
authorities may not have enough room to defend the won as a $200 billion foreign
reserve stockpile is widely seen as a psychological support level. The BOK has
tapped more than half of a $30 billion currency swap line with the U.S.
"As economic and financial uncertainty lingers, it seems that the authorities may
have difficulty in aggressively stepping in the market down the road," Jeon said,
adding that the local currency will be under downward pressure given the sharply
slowing economy and rising corporate default risks.
