Korean currency breaches 1,500-won mark on fresh credit fears

SEOUL, Feb. 20 (Yonhap) -- The South Korean currency plunged against the U.S.
dollar Friday, breaching the 1,500-won mark for the first time in three months,
as renewed concerns over a credit crisis prompted foreigners to dump local
shares, dealers said.

The local currency was trading at 1,501.75 to the greenback as of 10:44 a.m.,
down 20.75 on from the previous session's close. The currency dipped as low as
1,507 won at one point, with its value falling around 20 percent against the
dollar so far this year.
It was the first time that the won broke the 1,500-mark during intra-day trading
since Nov. 26 of last year.
The tumble came as foreign investors dumped local shares in pursuit of safer
assets amid a looming credit crisis. Massive foreign sell-offs sent the country's
key stock index down 2.71 percent.
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. A growing default risk in eastern European
countries has added to concerns.
On Thursday, Finance Minister Yoon Jeung-hyun dismissed worries over the bonds,
saying South Korea's foreign reserves -- which total roughly $200 billion -- are
sufficient enough to handle any contingency
He noted, however, that the government and the central bank are "closely"
watching the market and are prepared to take action should the market suffer
sharp fluctuation.
kokobj@yna.co.kr
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