Korean Won Little Changed, Bonds Fall Before BOK Rate Decision
The Bank of Korea is forecast to keep the benchmark seven-day repurchase rate unchanged at 2.50 percent at today’s monetary policy meeting, according to all 15 economists surveyed by Bloomberg. Global funds sold more local shares than they bought for a fifth day, exchange data show. Samsung Heavy Industries Co., the world’s second-biggest shipbuilder, obtained a 1.5 trillion won ($1.3 billion) order for two rigs, the company said in a regulatory filing yesterday.
The won traded at 1,133.28 per dollar as of 9:52 a.m. in Seoul, compared with 1,133.70 yesterday, according to data compiled by Bloomberg. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, rose 11 basis points, or 0.11 percentage point, to 10.93 percent.
“Exporters are expected to sell dollars after Samsung Heavy Industries got some orders, which may be supporting the won,” said Son Eun Jeong, an analyst at Woori Futures Co. in Seoul. “As foreign investors continue to sell local shares, it may limit a further rise in the won.”
Foreign funds sold $1.89 billion more South Korean shares than they bought as of June 12, exchange data show. Cuts in the benchmark interest rate won’t affect inflation much at this stage, Finance Minister Hyun Oh Seok said at a parliament session in Seoul yesterday. The central bank unexpectedly cut the benchmark rate by 25 basis points at a meeting on May 9, saying “downside risks to growth remain considerable.”
The yield on the 2.75 percent notes due March 2018 rose three basis points to 3.09 percent, prices from Korea Exchange Inc. show.
To contact the reporter on this story: Yewon Kang in Seoul at email@example.com