Feb. 22 (Bloomberg) -- South Korea’s won declined for the first time in four days on concern Europe’s debt crisis will linger following a Greek bailout deal. Government bonds were steady.
Euro-area finance ministers approved 130 billion euros ($172 billion) in aid for Greece yesterday by tapping into European Central Bank profits and coaxing investors into providing more debt relief. The Kospi Index of shares advanced 0.2 percent as overseas investors bought more Korean shares than they sold for a fourth day, building on net purchases of $8.5 billion this year through yesterday.
“With the euro-region finance ministers’ meeting over, it’s hard to find momentum for currencies to gain,” said Kim Seong Soo, a Seoul-based currency dealer at Kyongnam Bank. “We are seeing the won trade within a range, with South Korean exporters and importers buying and selling dollars whenever there are moves.”
The won slid 0.3 percent to 1,126.00 per dollar in Seoul, according to data compiled by Bloomberg. It strengthened 0.8 percent in the last three days.
The yield on South Korea’s 3.25 percent debt due December 2014 was unchanged at 3.47 percent, Korea Exchange Inc. prices show. Three-year bond futures rose 0.02 percent to 104.15. The one-year interest-rate swap advanced two basis points, or 0.02 percentage point, to 3.50 percent.
“The majority opinion in the market is that the Greek aid has merely delayed the country’s default, so the agreement reached yesterday won’t be enough to weaken demand for South Korea’s bonds,” Kim Nam Hyun, a Seoul-based fixed income analyst at Eugene Investment & Futures, wrote in a report today.
--Editors: James Regan, Anil Varma
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