October 10th 2008
Korean Won Pares Losses
It seems the Korean Won has (temporarily) bottomed out, reversing one of the largest declines in its history. The currency’s 5% daily jump has made it one of one of the few bright spots in Asia this week, where stock markets and currencies collapsed due to a complete lack of confidence. Analysts attribute the jump to a rumor that Korean regulators are trying to ferret out speculators, who are believed to have driven the Won down over the last few months. As a result, a sudden surge of foreign capital poured into Korea, as investors returned with renewed vigor, confident that the Korean government is prepared to deal domestically with the crisis that is gripping global financial markets. Bloomberg News reports:
South Korea’s won completed its biggest jump since March 1998 after a meeting among financial regulators prompted speculation that the government will step up support for the currency.