Korean Won Is Little Changed on Speculation BOK Will Intervene

By Kim Kyoungwha and Judy Chen

Aug. 21 (Bloomberg) -- South Korea's won was little changed on speculation policy makers will intervene in the market to help reduce inflation from a decade high.

Traders are cautious after the Bank of Korea yesterday bought the local currency to defend the ``psychologically important barrier'' of 1,050 won to the dollar, according to Ko Yun Jin, a currency dealer with Kookmin Bank in Seoul. Vice Finance Minister Kim Dong Soo said yesterday the government is monitoring volatile currency moves.

``The dollar's upside is capped by intervention fears,'' Ko said. ``Still, hefty foreign sales of local stocks in the past couple of days will curb any gains in the won as well.''

The currency traded at 1,048.70 against the dollar as of 9:15 a.m. in Seoul, compared with 1,049.40 yesterday, according to Seoul Money Brokerage Services Ltd. The won fell 11 percent this year, the worst performer after the Thai baht, among 10 most-active Asian currencies outside of Japan.

Central banks intervene in currency market by either selling or buying foreign exchange.

To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net; Judy Chen in Shanghai at xchen45@bloomberg.net