South Korea Won Falls as Overseas Investors Dump Local Stocks

By Kim Kyoungwha and Judy Chen

Sept. 11 (Bloomberg) -- South Korea's won fell after a slide in local stocks added to speculation that overseas investors will shift funds out of the nation's assets.

The currency slumped 15 percent this year as global investors sold bonds and equities on concern that the country may be headed for a financial crisis. Losses in the won are likely to be limited after Vice Finance Minister Bae Kook Hwan said officials will take action when the market is ``volatile.''

``Demand for the dollar remains strong and traders are keeping an eye on intervention,'' said Kim Myung Hoon, head of foreign exchange team with Industrial Bank of Korea in Seoul.

The won fell 0.3 percent to 1,099.30 against the dollar as of 9:34 a.m. in Seoul, compared with 1,095.50 yesterday, according to Seoul Money Brokerage Services Ltd. The currency will trade between 1,090 and 1,100 today, Lee said.

The currency is on course for a weekly gain, ending six weeks of decline, the longest slide since April 2001.

Central banks intervene in the currency market by 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;