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Seoul: Won fluctuates after the BOK cuts rates; stocks at 2016 high

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The South Korean won fluctuated on Thursday morning after the Bank of Korea unexpectedly cut rates to a record low in its June policy meeting.

[SEOUL] The South Korean won fluctuated on Thursday morning after the Bank of Korea unexpectedly cut rates to a record low in its June policy meeting.

The won was quoted at 1,155.7 as of 0219 GMT, strengthening from Wednesday's close of 1,156.6.

South Korea's central bank cut its policy rate by 25 basis points to 1.25 percent, as inflation has failed to accelerate and exports have yet to rebound.

"The won eased a bit shortly after the rate cut was announced, but it climbed back up. The cut, though it was surprising, seems insufficient to change the won's direction for now," said Jung Sung Yoon, a foreign exchange analyst at Hyundai Futures.

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Mr Jung added that the won will find its floor around the 1,150 level and may weaken depending on how other market factors play out, including results from the Bank of Japan's monetary policy meeting and other US economic indicators.

South Korean shares notched a 2016 peak after the BOK lowered its policy rate.

The Korea Composite Stock Price Index (Kospi) was up 0.2 per cent at 2,030.24 points.

Offshore investors were poised to be buyers for three consecutive sessions, purchasing a net 100.4 billion Korean won (S$117.2 million) worth of Kospi shares near mid-session, buttressing the index.

Market heavyweight Samsung Electronics Co Ltd shares rose 1.6 per cent, and were set for a seventh straight session of gains.

Tech firm LG Electronics Inc gained 3.7 per cent.

Decliners outnumbered advancers 449 to 349.

June futures on three-year treasury bonds gained 0.09 point to 110.65, reacting to the BOK's policy decision to cut rates for the month.

REUTERS

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