Deutsche Bank Sees Won Dropping in April as Stock Dividends Paid

  • Currency to weaken as foreigners repatriate payouts: lender
  • Overseas investors net buyers of local stocks on Thursday

South Korea’s won will fall as much as 4.1 percent by the end of the month as overseas investors convert their annual share payouts to dollars, according to Deutsche Bank AG.

“Foreigner demand for dollars to repatriate their stock dividends will weigh on the won this month,” said Choi Kyungjin, head of fixed income and currencies at Deutsche Bank in Seoul. The Korean currency will drop to 1,170 to 1,200 a dollar by the end of April, he forecast.

The won rose 0.4 percent to 1,151.33 a dollar in Seoul, paring its drop this month to 0.7 percent, data compiled by Bloomberg show. The currency surged 8.2 percent in March, the most in seven years and the biggest gain in Asia.

The won has been supported by $2.5 billion of inflows into Korean bonds and stocks this year, exchange data show. Foreign funds bought a net $237 million of local shares on Thursday, the most in three weeks, as Brent crude rose for a third day and after the release of minutes from the Federal Open Market Committee that suggested the U.S. central bank would take a gradual approach to raising interest rates.

Sovereign bonds fell, with the 10-year and three-year yields rising one basis point each to 1.8 percent and 1.47 percent, respectively, according to prices from Korea Exchange.

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