Won Completes First Gain in Six Days on Oil Rally, Bond InflowsLilian Karunungan and Kyung-Jin Kim
Foreign funds bought a net $317 million of local debt Monday
South Korea's 10-year government bonds decline for fifth day
The won completed its first gain in six days as an oil rally encouraged risk-taking and after foreign funds pumped money into South Korean bonds.
Brent crude traded in excess of $34 a barrel after an agreement last week between Russia and Saudi Arabia to freeze output. Overseas investors bought a net $317 million of local-currency bonds on Monday, the most since Feb. 4, paring outflows to $1.5 billion this month, exchange data show. The won fell to a five-year low last week, prompting policy makers to say that movements had been excessive and necessary action to curb volatility would be taken.
“The risk-on mood in global markets prompted unwinding of short positions in the won," Jeon Seung Ji, a currency analyst at Samsung Futures Inc. in Seoul, wrote in a research note. “The won also gained as foreigners’ selling pressure in the bond market wanes."
The South Korean currency gained 0.3 percent to close at 1,231.30 a dollar in Seoul, according to data compiled by Bloomberg. The won has dropped 4.8 percent this year in the biggest decline in Asia.
Ten-year government bonds declined for a fifth day, pushing the yield up one basis point to 1.84 percent. The yield on three-year notes also increased one basis point to 1.49 percent.