Korean Won Slips 4th Day, Longest in 2 Months, on Stock Sales

By Kim Kyoungwha

Jan. 13 (Bloomberg) -- South Korea’s won fell for a fourth day, the longest losing streak in almost two months, as concern the economy is headed for a recession prompted global funds to sell the nation’s shares.

The Korean currency, Asia’s worst performer last year, weakened to the lowest in a month as foreign investors sold more shares than they bought for a fourth day, driving the Kospi index 1.9 percent lower. The Korean economy faces a difficult first half, Vice Finance Minister Kim Dong Soo said at a government meeting in Gwacheon today.

“With the economy cooling, there are worries about corporate earnings, which will hit the stock markets and then affect the foreign exchange moves,” said Ko Yun Jin, a currency dealer with Kookmin Bank in Seoul. “A rapid drop in the won may be limited as exporters are willing to sell dollars on highs.”

The won fell 1.1 percent to 1,374.35 per dollar as of 9:28 a.m. in Seoul, according to Seoul Money Brokerage Services Ltd. The currency lost 26 percent last year, the worst performance among the 10 most-traded Asian currencies outside of Japan.

Exports slumped for a second straight month in December, industrial production fell by the most on record in November and confidence among manufacturers tumbled to the lowest level ever. The Bank of Korea cut its benchmark interest rate by a half- point to a record low of 2.5 percent on Jan. 9.

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