Won gains 1.1 pct against U.S. dollar

SEOUL, Feb. 23 (Yonhap) -- The South Korean currency gained for the first time in
10 sessions on Monday as investor sentiment was eased by rising stock prices and
Asian countries' agreement to expand a regional currency swap fund, dealers said.

The local currency closed at 1,489 won to the greenback, up 17 won, or 1.1
percent, from the previous session's close. The Korean currency rose as high as
1,480 won at one point with its value falling 15.4 percent against the dollar so
far this year.
"The won rose after the stock prices rebounded on the news that the U.S.
government may increase its stake in Citigroup," said Shin Jin-ho, a currency
analyst at Woori Futures Co. "The reports that financial chiefs of Asian
countries agreed to expand the size of their regional currency swap fund to $120
billion also helped calm sentiment."
The Wall Street Journal reported that the U.S. government may hold up to 40
percent of Citigroup's common stocks. The report helped the country's key stock
index turn positive to close 3.15 percent higher.
On Sunday, finance ministers of 10 ASEAN countries plus South Korea, China and
Japan agreed to expand an $80 billion joint fund established in the wake of the
1997-98 Asian financial meltdown to tackle short-term liquidity problems in the
region.
The won's gain also comes one day after officials at the government and the
central bank warned that they could tap the country's foreign exchange reserves
of over US$200 billion to stem the won's decline.
However, despite the won's gain, analysts say the local currency would be under
downward pressure for the time being.
"In March and April, dollar demand will be strong as foreign investors begin to
repatriate dividends to their home countries," Shin said. "The slowing economy
and contract withdrawal faced by local shipbuilders are also putting downward
pressure on the won."
sooyeon@yna.co.kr
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