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Korean won falls as investors look for future rate-cut signals
[SEOUL] South Korea's won fell as investors focused on post interest-rate review comments from the central bank governor for indications of what measures he may take to shore up the economy amid global market turmoil.
The Bank of Korea will keep its benchmark seven-day repurchase rate at a record low 1.5 per cent for an eighth meeting on Tuesday, according to all 15 economists surveyed by Bloomberg.
The won is Asia's worst-performing currency this year as global funds pull money from the nation's stocks and bonds on signs growth around the world is slowing, which is damping demand for riskier assets in developing countries.
"The market has already priced in at least one rate cut, although the BOK is likely to stay on hold this month to wait for market volatility to subside," said Kim Jin Pyung, a fixed-income analyst at Samsung Futures Inc in Seoul.
"We are watching for signs that the central bank has grown more concerned about the economic outlook."
The won declined 0.5 per cent to 1,214.04 a US dollar as of 9:26 am local time, after rising on Monday as global equities rebounded from a bear market, according to data compiled by Bloomberg.
The currency has lost 3.4 per cent this year as overseas investors sold a net US$2.9 billion of South Korean shares.
Governor Lee Ju Yeol will hold a press briefing after the rate decision. He said on Feb 10 that the central bank will stabilize financial markets when moves are deemed excessive and monitor risks related to North Korea's rocket launch on Feb 7.
Exports slumped in January by the most since August 2009. Government bonds were little changed, with the 2018 note yieldat 1.48 per cent and the 10 year at 1.83 per cent, Korea Exchange prices show.