S. Korean won dips 3.13 pct against dollar

SEOUL, March 30 (Yonhap) -- The South Korean currency fell more than 3 percent
against the U.S. dollar on Monday as the Seoul bourse took a beating from massive
foreign selling, dealers said.
The local currency closed at 1,391.5 won to the dollar, down 43.5 won, or 3.13
percent, from the previous session. It was the largest daily drop since Jan. 15
when it plunged 44.5 won.
"The won's fall came after rumors about possible bankruptcies of U.S. carmakers
sent the Seoul stock market sharply lower, amplifying uncertainty," said Lim
Ji-won, an economist at JPMorgan Chase & Co. "The won had sharply gained ground
to the greenback in recent sessions."
The local currency fell to as low as 1,397 won at one point with its value
dipping 9.49 percent to the dollar so far this year.
The country's key stock index declined 3.24 percent to 1,197.46 with foreign
investors selling a net 108.6 billion won (US$78.2 million) worth of local stocks
on the main bourse.
Asian stock markets extended losses during the session amid reports that the U.S.
government rejected restructuring plans of General Motors Corp and Chrysler LLC,
sparking fears over their possible bankruptcies .
The won's weakness also comes despite the news that the country's current account
swung to a surplus in February due to a sharp decline in imports and the nation
may post a record surplus of around $5 billion for March. Importers' demand for
the greenback to settle end-month bills also exerted donward pressure on the
Korean won, experts added.
Analysts said the local foreign exchange market will likely see high volatility
down the road as doubts surrounding the global financial rout and the economic
slump persist.
"Although the Korean currency should stabilize toward the year-end, uncertainty
stemming from external factors is expected to increase the won's fluctuation,"
Lim said, adding that the won is likely to rise to the 1,200-won level by the end
of this year.
sooyeon@yna.co.kr
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