The South Korean won rose today against the U.S. dollar, after posting a largest drop in more than 10 years yesterday, as the financial markets showed growth in U.S. and Asia.
The countrys central bank said that it will be working with the local banks directly to provide the needed foreign currency liquidity. Analysts believe that the Bank of Korea should guarantee the foreign debts of the banks so that they could attract the funds overseas.
The expectations that the supply of the U.S. dollars will grow soon helped the won to post a daily growth after two days of falling and reduce the yearly loss to 30 percent against the greenback.
Its more likely that the current correction is nothing but a temporary boost of optimism. The main problems of the Korean financial system are still there though. With the worsening of the global situation, Korean won will continue its decline.
USD/KRW fell from 1369.5 to 1333.4 as of 6:15 GMT today with the intraday change in the currency rate being minimal, while the largest part of the rate action provided through the gaps between the trading sessions.
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