Seoul, Dec 28 (IANS) Experts on Sunday viewed the 1,420 level as an annual average for the won against the U.S. dollar, as financial authorities stepped up verbal intervention to arrest the won’s slide.
The Korean won closed at 1,440.3 won against the US dollar on Friday, marking the lowest level since Nov. 4, according to data from Seoul Money Brokerage Services, reports Yonhap news agency.
With financial authorities stepping up verbal intervention to curb the won’s weakness, the won rose sharply by over 30 won against the U.S. dollar at one point last week.
“We are seeing a new psychological resistance level being formed and the won-dollar exchange rate’s upward momentum being curbed. The government’s stabilization measures are likely to remain significant till the end of the year,” Baek Seok-hyun, an economist at Shinhan Bank’s S&T Center, said.
Baek predicted the won-dollar exchange rate to close at the 1,400 won to 1,420 won range by the end of the year.
Economist Lim Hwan-yeol from Woori Bank has set the year-end won-dollar exchange rate at around 1,440 won, noting the likelihood of export companies releasing their dollar reserves into the market remains high.
The won-dollar exchange rate at the end of the year is significant because it serves as a benchmark for companies and financial institutions to evaluate their foreign-currency-denominated liabilities in their financial statements.
The highest year-end won-dollar exchange rate was recorded in 1997, during the financial crisis, when the won was quoted at 1,695 won per U.S. dollar.
Meanwhile, South Korean stocks ended higher on Friday, driven by sharp gains in big-cap tech shares, including Samsung Electronics and SK hynix. The local currency gained ground against the U.S. dollar amid the country’s efforts to stabilise the foreign exchange (FX) market.
The benchmark Korea Composite Stock Price Index (KOSPI) added 21.06 points, or 0.51 percent, to close at 4,129.68.
Trade volume was slightly heavy at 502.7 million shares worth 16 trillion won (US$11.1 billion), with losers outnumbering winners 639 to 246.
—IANS
na/
