Korean Won Set for Best Week in 3 Months as Stocks Extend Rally

By Kim Kyoungwha

March 20 (Bloomberg) -- South Korea’s won strengthened, set to complete its biggest weekly advance in three months, as economic stimulus and stock gains helped draw funds to the nation’s assets.

The currency traded near a five-week high after Finance Minister Yoon Jeung Hyun said yesterday the government is planning an extra spending package of as much as 29 trillion won ($21 billion) to aid the economy. The Kospi stock index rose 0.7 percent, poised for a second weekly advance.

“The market is still in recovery mode,” said Ko Yun Jin, a currency dealer with Kookmin Bank in Seoul. “But the won also faces modest downward pressure after recent bull runs as there’s demand for dollars as overseas investors repatriate dividends and importers pay bills.”

The won gained 0.4 percent to 1,391.50 per dollar as of 9:48 a.m. in Seoul, according to Seoul Money Brokerage Services Ltd. The currency rose 6.2 percent this week, paring this year’s loss to 9.5 percent, still Asia’s worst performance.

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