By Kim Kyoungwha
Nov. 5 (Bloomberg) -- South Korea's won rose as a surge in global stocks helped to fuel optimism that overseas investors will return to emerging markets.
The currency advanced 13 percent in the past week as policy makers signed a $30 billion swap deal with the U.S., guaranteed bank debt and unveiled a stimulus plan to quash concerns that the nation may be headed for a repeat of the 1997 financial crisis. The Kospi index soared 3.2 percent, tracking a rally in U.S. stocks on presidential election day.
``Sentiment is getting a boost from rising stocks,'' said Kim Yule, a currency dealer with BNP Paribas in Seoul. ``Demand and supply of dollars is key to movements and the market is watching how importers and foreign investors are behaving.''
Korea's currency strengthened 1.8 percent to 1,266 against the dollar as of 9:19 a.m. local time, according to Seoul Money Brokerage Services Ltd. It fell 26 percent this year, the worst among the 10 most-traded Asian currencies outside of Japan.
Global investors bought more local shares than they sold, ending two days of net sales, according to Korea Exchange.
Vice Finance Minister Kim Dong Soo said today foreign- exchange liquidity will improve as the country increases efforts to boost currency swaps and improve its trade balance.
``When taking into account all those factors, liquidity problems in the currency market will improve as time goes by,'' Kim said on SBS radio today. ``We have already agreed with China to boost currency swaps.''
To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net.
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