South Korean Won Nears 3-Month High as Global Funds Buy Stocks

By Kim Kyoungwha

April 14 (Bloomberg) -- South Korea’s won strengthened, approaching a three-month high, as overseas investors added to their holdings of local stocks for the fourth day in a row.

The won has surged 12 percent in the past month, the best performance among Asia’s 10 most-used currencies, as record-low borrowing costs and government stimulus plans help combat an economic slump. It reached an 11-year low on March 6 on concern sliding exports and tighter global credit markets would starve the nation of foreign exchange needed to pay overseas debt.

“Foreign stock buying is giving a sustained boost to the won,” said Park Sang Bae, a currency dealer with Industrial Bank of Korea in Seoul. Still, “the upside in the currency is limited this week as more dividends to foreigners are due. The market may enter a consolidation soon.”

The won rose 0.3 percent to 1,325.75 per dollar as of 9:45 a.m. in Seoul, according to a data compiled by Bloomberg. It touched 1,298.05 on April 10, the highest since Jan. 8. The Kospi index slid 0.5 percent, after yesterday posting its highest close since October.

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