By Kim Kyoungwha
Nov. 12 (Bloomberg) -- South Korea's won weakened for a second day on concern overseas investors are cutting their holdings of the nation's assets as a global economic slump deters investment in emerging markets.
The currency has dropped 31 percent against the dollar this year, Asia's worst performance, as foreign investors pulled $37 billion out of local stocks. Global funds also sold more local debt than they bought in October, after net purchases in the previous two months. Fitch Ratings downgraded its default ratings outlooks for Korean banks to negative yesterday, after lowering the nation's sovereign ratings outlook to negative.
``The currency market is taking a cue from the stock markets that show investor sentiment remains bruised by ongoing financial crisis worldwide,'' said Kim Sung Soon, a currency dealer with Industrial Bank of Korea in Seoul. ``Selling for the won far outweighs purchases.''
The won fell 1.3 percent to 1,347.25 per dollar at 9:22 a.m. in Seoul, according to Seoul Money Brokerage Services Ltd.
Finance Minister Kang Man Soo said his government was cooperating with the central bank to support financial markets.
``The government and the central bank have taken steps to help stabilize markets and will continue to work together,'' Kang said at a meeting in Gwacheon today. ``The global financial turmoil is spreading to affect the real economy. We need to find ways to create more jobs, especially for younger people.''
To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net.
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