Forex Blog: Currency Trading News & Analysis.

September 2nd 2008

Korean Won Gets Hammered

Even given the Dollar’s universally strong performance over the last month, the slide in the value of the Korean Won has been an anomaly, falling over 10% over the same time period and reaching a 4-year low. Analysts attribute the decline to a widening of the country’s current account imbalance brought about by a collapse in confidence in Korean securities, namely stocks and bonds. Foreign investors are rushing for the exits in masse, and some are speculating that bonds worth $7 Billion that mature this week will lead to a further outflow of capital. Earlier this year, the Central Bank of Korea spent over $30 Billion propping up the Won, but it has thus far refrained from intervening in the midst of the current slide. At $250 Billion, the Bank’s foreign exchange reserves are massive, and it could easily attempt to back up its stern warnings to bearish investors with a large-scale intervention. Thomson Financial News reports:

The government did not intend to intervene in currency markets, the MoneyToday, the online news service, quoted an unnamed official as saying on Sunday. Markets are mystified at the reluctance of Korean authorities to back their words with dollar sales.

Read More: Korea warns currency bears, but shrinks from action

SocialTwist Tell-a-Friend
Posted by Adam Kritzer | in Emerging Currencies | No Comments »

Sponsored Offers

FREE Daily Email Updates

Enter your email address:

Delivered by FeedBurner

Have Questions? Want to Share Your Review?

Be heard. Please share your reviews today!

Neighboring Posts

© 2004 - 2023 Forex Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.