South Korea's Won Advances as Global Bank Rescues Lift Stocks

By Kim Kyoungwha

Oct. 14 (Bloomberg) -- South Korea's won rose as local stocks rallied, buoyed by a U.S.-led push to prop up troubled banks and flood the global financial system with dollars.

The currency climbed for a fourth day, extending gains in the period to 15 percent, as banks also refrain from buying dollars after Deputy Finance Minister Shin Je Yoon said last week that the government will check for ``speculative forces'' in the market. The Kospi index jumped 5.2 percent as foreign investors bought more shares than they sold for the first time in two weeks, according to Korea Exchange.


``The won is gaining lost ground fast as local stocks extended their rally,'' said Lee Myung Hoon, a Seoul-based currency trader with Industrial Bank of Korea. ``The regulator's day-to-day review of currency trades is also making speculators refrain from bidding for dollars aggressively.''

The won rose 3 percent to 1,205.05 per dollar as of 10 a.m. in Seoul, according to Seoul Money Brokerage Services Ltd. The advance pared this year's loss to 23 percent, still the biggest drop among Asia's 10 most-traded currencies.

South Korea's Finance Minister Kang Man Soo said global efforts to stabilize the world's financial markets need to include emerging and developing countries.

``We should not forget that emerging and developing economies are suffering the most,'' Kang said today in a prepared speech at the annual meetings of the International Monetary Fund and the World Bank in Washington. Measures such as liquidity provision should ``engage'' these economies, he said.

Asian stocks and currencies rose as U.S. stocks staged the biggest rally in seven decades. The Standard & Poor's 500 Index rebounded from its worst week in 75 years with an 11.6 percent advance, its steepest since 1939, and the Dow Jones Industrial Average climbed more than 936 points.

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