Oct. 30 (Bloomberg) -- South Korea’s won strengthened to a 13-month high on speculation exporters sold the dollar to convert overseas earnings. Government bonds advanced.
The won recovered from a loss of as much as 0.2 percent earlier after official data showed today the current-account surplus widened to $6.07 billion in September on increased exports of cars and electronics. That was the second-biggest excess on record. The Bank of Korea said today it is discussing plans to review banks’ currency forward positions with the Financial Supervisory Service, which may lead to regulation.
“There were some investors taking long positions on the dollar after the central bank’s forward-position review report,” said Cho Young Bok, a Seoul-based currency dealer at Daegu Bank. “Exporters selling the greenback supported the won and triggered investors to cut their long positions.” A long position is a bet an asset will rise in value.
The won appreciated 0.4 percent to 1,091.50 per dollar at the close in Seoul, according to data compiled by Bloomberg. The currency touched 1,090.50 earlier, the strongest level since Sept. 13, 2011. One-month implied volatility for the won, a measure of exchange-rate swings used to price options, fell eight basis points, or 0.08 percentage point, to 5.75 percent.
One of seven board members at the Bank of Korea opposed cutting the benchmark interest rate to 2.75 percent from 3 percent on Oct. 11, according to minutes of the meeting released today after financial markets had closed.
The yield on the government’s 2.75 percent bonds due September 2017 slipped one basis point to 2.85 percent, Korea Exchange Inc. prices show. The one-year interest-rate swap was little changed at 2.74 percent.
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