By Kim Kyoungwha
Nov. 21 (Bloomberg) -- South Korea's won fell, headed for a third weekly decline against the dollar, on concern Asia's fourth-largest economy will slip into recession for the first time in a decade.
The Korean currency slumped to a decade-low, having wiped out the 14 percent gain recorded after a $30 billion swap agreement was agreed with the Federal Reserve on Oct. 30. The Kospi stock index fell for a ninth day, the longest losing streak since 2000, as overseas investors dumped the nation's assets, increasing demand for dollars.
``The upward pressure on the dollar is still there as global stocks falter,'' said Ko Yun Jin, a currency dealer with Kookmin Bank in Seoul. ``With the exchange rate above 1,500, investors are watchful that the authorities may intervene.''
The won declined 7.2 percent this week to 1,508.50 per dollar as of 9:42 a.m. local time, according to Seoul Money Brokerage Services Ltd. It earlier touched 1,524.50, the weakest since March 1998, after yesterday closing at 1,497.
South Korea's economy will shrink 3 percent in 2009, UBS AG forecast today, revising an earlier projection for 1.1 percent growth. Policy makers have cut interest rates at an unprecedented pace, guaranteed banks' debt and announced a 14 trillion won ($9.3 billion) stimulus package to spur expansion.
To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net.
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