South Korean Won Advances as Local Stocks End Two-Day Decline

By Kim Kyoungwha

Dec. 3 (Bloomberg) -- South Korea’s won rose for the sixth time in seven days as local stocks advanced, fueling speculation overseas investors will buy more of the nation’s assets.

The won rallied from yesterday’s biggest decline in a week as the finance ministry said today the authorities are ready to act to “smooth” movements in the currency. The Kospi stock index gained 0.9 percent, snapping a two-day losing streak. Korea’s foreign-exchange reserves fell in November to the lowest level in almost four years, a government report showed today.

“The currency market is moving step by step with stock prices these days,” said Ko Yun Jin, a currency dealer at Kookmin Bank in Seoul. “A turnaround in stocks is positive to the won and the reserves decline was smaller than expected.”

The won rose 0.2 percent to 1,461.50 per dollar at 9:47 a.m. local time, according to Seoul Money Brokerage Services Ltd. The currency fell 36 percent this year, the biggest decline of the 10 most-traded currencies in Asia outside Japan.

Korea’s foreign-exchange reserves fell to $200.5 billion, the least since January 2005, from $212.3 billion in October, the Bank of Korea said in Seoul. That was the eighth consecutive monthly decline.

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