S.Korean won ends up 2.3 pct on stimulus package

SEOUL: The South Korean won rose 2.3 percent against the dollar on Monday as the government announced a fresh $11 billion economic stimulus package, easing worries about a sharp slowdown in Asia's fourth-largest economy. The won found additional support on rising optimism the central bank may cut interest rates further this week to bolster the country's economic growth and as exporters chased the currency for settlements. Lower interest rate views typically spark selling in the local currency, but analysts said the won tends to respond more to economic growth prospects than rate forecasts. The South Korean unit is expected to rise further as global measures, including expected interest rate cuts, are likely to soothe concerns about the gloomy economic outlook, analysts said. The government's various economic packages, along with interest rates cuts, boosted investors' sentiment on the won, said Jeon Seung-ji, an analyst at Samsung Futures Inc. The local currency was quoted at 1,261.6/3.0 per dollar as of 0600 GMT, compared with Friday's domestic close of 1,291. The won rose to as high as 1,253.9. The government announced an economic package of new spending and tax cuts worth at least 14 trillion won ($11 billion) to help assure a soft landing in South Korea amid a looming global recession. [ID:nSEO370901] The move came as markets geared for more interest rate cuts in Europe and Australia in a frantic move to keep the financial crisis from plunging the world into its worst recession in decades. That helped Asia shares, including South Korea stocks, rally with Seoul shares ending up 1.44 percent. However, foreign investors sold a net 44.3 billion won worth in stocks in the country's main exchange. Still, analysts said the package was not enough to protect growth much as the global economy was slowing regardless of the various measures taken by the world's authorities and given sluggish domestic demand. The steps (by South Korea) are likely to prevent a sharper slowdown in the overall economy, rather than to lift growth much. We will also have to wait for the effect, said June Park, an economist at Woori Investment & Securities. Reflecting the concerns, South Korea's annual exports in October grew by a weaker-then-expected 10.0 percent, the slowest since September 2007 when the country's overseas sales fell 1.1 percent from a year earlier. The country's housing prices fell 0.1 percent in October from September, marking the first monthly fall in nearly four years, data showed. More investors expect the Bank of Korea to lower interest rates again later this week amid growing worries about a slowing economy and as inflation eases. South Korean consumer prices in October rose 4.8 percent from a year earlier, the slowest annual pace of consumer inflation since April this year, other data showed. The Bank of Korea is set to hold an interest rate setting meeting on Friday. The central bank last week cut its policy rate by a record 75 basis points in an emergency meeting. 0600 GMT 0355 GMT prev close Won 1,261.6/3.0 1,284.5/5.7 1,291 Yen/won 12.6860/86 12.9340/04 13.1580/51 KOSPI 1,129.08 1,136.29 1,113.06

S.Korean won ends up 2.3 pct on stimulus package

The South Korean won rose 2.3 percent against the dollar on Monday as the government announced a fresh $11 billion economic stimulus package, easing worries about a sharp slowdown in Asia's fourth-largest economy.

More from our Partners

Browse Companies

Popular Categories

Hot on Web

In Case you missed it

Top Searched Companies

Latest News

Download ET APP

Follow us on

become a member