South Korean Won Rebounds From Lowest in Month on Stock Advance

By Kim Kyoungwha

Jan. 16 (Bloomberg) -- South Korea’s won rose, rebounding from a one-month low, as local stocks rallied on the prospects government aid will shore up Bank of America Corp.

The currency, Asia’s worst performer last year, is still headed for its biggest weekly loss in almost two months on concern a deepening global recession will hurt demand for Korean exports and that further U.S. bank failures will prompt hoarding of dollars. South Korea’s department-store sales fell by the most in almost two years in December, government data showed.

“Currency moves are getting initial support from gains in the stock markets,” said Kim Jae Eun, an economist with Hana Daetoo Securities Co. in Seoul. Still, she added, “doubts and fears on whether policy measures will work to shore up the economy are growing, shaking investment confidence.”

The won rose 0.9 percent to 1,379.85 per dollar as of 9:21 a.m. in Seoul, according to Seoul Money Brokerage Services Ltd. The currency lost 2.7 percent on the week, the biggest since Nov. 21 and the worst among the 10 most-traded Asian currencies outside of Japan. The Kospi index is up 0.5 percent after a 6 percent drop yesterday.

Sales at the nation’s three-biggest department stores, including Lotte Shopping Co., declined 4.5 percent from a year earlier, after gaining 7.5 percent in November, the Ministry of Knowledge Economy said in Gwacheon today. Sales at discount stores dropped 5.8 percent following November’s 2.3 percent rise.

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