Won forecast to fall 3.6% this monthSouth Korea’s won will fall as much as 3.6 percent by the end of the month as overseas investors convert their annual share payouts to dollars, according to Deutsche Bank AG.
“Foreigner demand for dollars to repatriate their stock dividends will weigh on the won this month,” said Choi Kyungjin, head of fixed income and currencies at Deutsche Bank in Seoul. The Korean currency will drop to 1,170 to 1,200 a dollar by the end of April, he forecast.
The won fell 0.1 percent to 1,156.8 a dollar at 12:18 p.m. in Seoul, taking its three-day decline to 0.9 percent, data compiled by Bloomberg show. The currency surged 8.2 percent in March, the most in seven years and the biggest gain in Asia.
The won has been supported by $2.3 billion of inflows into Korean bonds and stocks this year, exchange data show.
Foreign funds were net buyers of local shares on Thursday as Brent crude rose for a third day and after the release of minutes from the Federal Open Market Committee that suggested the U.S. central bank would take a gradual approach to raising interest rates.
“Speculation on foreigners’ dollar buying for the repatriation of stock dividends will limit the won’s gains today, while the dovish FOMC minutes and oil price rebound support the won,” Jeon Seung Ji, a foreign-exchange analyst at Samsung Futures Inc. in Seoul, wrote in a research note. Bloomberg
More in Economy
Online courses get failing grades from tech students
Help after the rains
The Gangnam-Gangbuk price gap remains
Government to create 15 smart green industrial complexes