Won Rises for Fourth Day on Speculation Exporters Sold Dollars

  • Expectations for yuan SDR inclusion also buoying won: Samsung
  • Bonds drop, pushing 10-year yield to highest in six weeks

South Korea’s won rose for a fourth day on speculation exporters are selling dollars to pay bills and as signs the yuan will soon be added to the International Monetary Fund’s basket of reserve currencies buoyed regional exchange rates.

The won advanced 0.1 percent to close at 1,131.96 a dollar in Seoul, data compiled by Bloomberg show. The currency rose to a one-week high of 1,127.47 earlier and has climbed 0.9 percent since Oct. 29. Its 4.7 percent rally this quarter is the best performance in Asia after Indonesia’s rupiah.

"Korean exporters continue to sell dollars as they can’t expect the greenback to strengthen much in the short term," said Jeon Seung Ji, a currency analyst at Samsung Futures Inc. in Seoul. Expectations the yuan will be added to the IMF’s Special Drawing Rights are supporting the Chinese currency and pushing up the won as well, she said.

The Washington-based lender, which is expected to make a decision later this month, has told authorities in Beijing that the yuan is likely to be added to the basket soon, according to Chinese officials with knowledge of the matter. South Korea’s foreign-exchange reserves rose for a second month in October to $369.6 billion, the central bank said Wednesday, following a report on Monday that showed the nation’s current-account surplus widened in September.

South Korean Finance Minister Choi Kyung Hwan and Xu Shaoshi, chairman of China’s National Development and Reform Commission, agreed at a meeting in Seoul over the weekend to support South Korea’s issuance of yuan-denominated debt in China and to start direct trading between the yuan and won in Shanghai.

Government bonds fell, pushing the yield on the notes due June 2025 up two basis points to a six-week high of 2.18 percent, Korea Exchange prices show. The three-year yield climbed one basis point to a seven-week high of 1.68 percent.

Before it's here, it's on the Bloomberg Terminal.