South Korea's Won Snaps Four-Day Winning Streak as Stocks Drop

By Kim Kyoungwha

Oct. 15 (Bloomberg) -- South Korea's won fell, ending a four-day run of gains, as rebounds in U.S. and Asian stocks stalled, suggesting U.S.-led efforts to ease a global credit crisis have still to revive investors' risk appetite.

The currency fell 23 percent this year, the worst performance among Asia's 10 most-traded currencies, as companies and banks scrambled for dollars to service debt and foreign investors pulled a record $24 billion out of local stocks. The Kospi stock index shed 1.2 percent, having rebounded 10 percent from a two-year low in the last two days as governments in the U.S. and Europe announced plans to invest in banks.

``The worst may be behind us but the won still remains the most susceptible Asian currency,'' said Dwyfor Evans, a currency strategist with State Street Global Markets in Hong Kong. ``When risk is back on, the won is bought back; when risk is taken off, it is sold.''

The won fell 0.5 percent to 1,214.30 against the dollar as of 9:20 a.m. in Seoul, according to Seoul Money Brokerage Services Ltd. It earlier rose as high as 1,169.9.

In a move to bolster the nation's currency reserves, the Bank of Korea will get $10 billion in U.S. currency or U.S. Treasuries from the National Pension Service by ending some of their currency-swap agreements ahead of schedule. The government may consider joining Europe in guaranteeing local banks' overseas borrowings if necessary, Edaily reported yesterday, citing Finance Minister Kang Man Soo.

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