South Korea’s won fell for a second day and bonds rose after government data showed exports expanded at the slowest pace in two years and inflation cooled.
Overseas sales increased 9.3 percent in October from a year earlier, following an 18.8 percent gain in September, the Ministry of Knowledge Economy said today. The trade surplus widened to $4.3 billion from $1.6 billion. Consumer prices rose the least this year in October, gaining 3.9 percent, data showed today.
“The trade surplus figure is positive, but the pace of export gains signals the nation’s economy may slow in the long term,” said Yun Se Min, a Seoul-based currency dealer at Busan Bank. “Inflation was lower than expected, which means the central bank has less incentive to boost the benchmark rate to stem price gains.”
The won weakened 0.3 percent to 1,113.88 per dollar in Seoul, after posting a 6.1 percent gain last month, according to data compiled by Bloomberg. The Kospi stock index was little changed today.
South Korea’s export growth may slow further in the fourth quarter as Europe’s debt crisis remains unresolved, said Han Jin Hyun, director general for trade at the Knowledge Economy Ministry. He spoke to reporters after the release of export data today
South Korea’s benchmark three-year bonds rose for a second day, pushing yields to the lowest level since Oct. 20. The yield on South Korea’s 3.5 percent bonds due June 2014 fell four basis points, or 0.04 percentage points, to 3.47 percent, Korea Exchange Inc. prices show.
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