Korea Won Rises After Biggest Loss in a Decade as Stocks Gain

By Kim Kyoungwha and Judy Chen

Sept. 17 (Bloomberg) -- South Korea's won rose following yesterday's biggest decline in a decade as Asian and U.S. stocks advanced after the Federal Reserve offered to provide a loan to American International Group Inc.

The Korean currency, Asia's worst performer this year, gained as the nation's Kospi share index jumped 2.8 percent after a loss of 6.1 percent yesterday, the most in 13 months. Policy makers in Korea said the government may provide cash to help stabilize markets that slumped in the wake of Lehman Brothers Holdings Inc.'s bankruptcy filing and as AIG sort capital.

``With the talk of an AIG rescue, risk appetite is reviving somewhat, lending support to the won,'' said Kim Yule, a currency dealer with BNP Paribas in Seoul.

Korea's currency climbed 1.1 percent to 1,146.55 against the dollar as of 9:22 a.m. in Seoul, according to Seoul Money Brokerage Services Ltd. The advance reduced this year's loss to 18 percent. The won fell the most since August 1998 yesterday as global investors accelerated sales of Asian equities.

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