Already a Bloomberg.com user?
Sign in with the same account.
South Korea’s won rose for the first time in four days after exporters sold dollars to lock in recent gains in the U.S. currency.
The won, which this week touched the strongest level in 17 months, fell 0.4 percent against the dollar in the past three days after authorities warned of steps to stem its advance. South Korea is studying various measures to reduce volatility in capital flows and currency movements, Vice Finance Minister Shin Je Yoon said yesterday. The yield on the government’s five-year bonds was within one basis point of a three-month low after producer prices dropped the most in three years.
“Some exporters are selling dollars to take profit,” said Sun Sung In, analyst at Shinhan Investment Corp. in Seoul. “Speculation of possible steps by the government to stem the won’s rise is limiting gains, while trade is narrow ahead of indicators including China’s gross domestic product.”
The won rose 0.2 percent to 1,056.73 per dollar as of 10:54 a.m. in Seoul, according to data compiled by Bloomberg. It touched 1,060.15 yesterday, the lowest level since Jan. 10, after climbing to 1,054.49 earlier this week, the strongest since August 2011. The won advanced 8.3 percent in 2012, the best performance among the 11-most traded Asian currencies.
South Korean producer prices fell as a stronger won lowered the cost of imported oil and raw materials. Prices declined 1.2 percent in December from a year earlier, the biggest drop since October 2009, data from the Bank of Korea showed today.
Central bank Governor Kim Choong Soo said Jan. 14 the nation will take an “active” response on the won if needed. Measures to slow the won’s appreciation could include “smoothing operations,” Kim said, adding authorities should act to normalize the exchange rate.
The Finance Ministry today denied a Maeil Business newspaper report that said the government is discussing imposing tax on foreign-exchange transactions.
The yield on the 2.75 percent bonds due September 2017 was unchanged at 2.83 percent, Korea Exchange prices show. It reached 2.82 percent on Jan. 10, the lowest level since Oct. 15.
To contact the reporter on this story: Seyoon Kim in Seoul at firstname.lastname@example.org
To contact the editor responsible for this story: James Regan at email@example.com