Won Falls to April Low After Lagarde Spurs Global Growth Angst

  • Asian currencies, stocks drop after warning from IMF head
  • Dividend repatriation also weighing on won: Dongbu analyst

South Korea’s won fell to the lowest level in April as concern global growth is slowing damped the outlook for emerging-market assets.

International Monetary Fund Managing Director Christine Lagarde said Thursday in New York that the lender is likely to lower its outlook for global growth. Minutes of the Federal Reserve’s March meeting released this week also pointed to heightened risks worldwide. While South Korea’s finance ministry said Friday that exports and industrial production are improving, it added that the world economy’s slow recovery and volatile international markets still pose risks to the nation.

The won depreciated 0.2 percent to close at 1,153.78 a dollar, according to data compiled by Bloomberg. It fell to 1,162.70 earlier, the weakest since March 29. The currency was little changed this week, and has gained 1.6 percent this year.

"The market has concerns over global economic growth," said Masashi Murata, a vice president at Brown Brothers Harriman & Co. in Tokyo. The won will probably trade between 1,150 and 1,180 a dollar this quarter, he said.

Deutsche Bank AG’s head of fixed income and currencies Choi Kyungjin said Thursday the won may drop to 1,200 a dollar this month as overseas investors convert their share payouts to dollars. While foreigners’ repatriation of stock dividends is weighing on the won, exporters’ dollar sales are helping to cap weakness, said Yuna Park, an analyst at Dongbu Securities Co. in Seoul.

Government bonds were little changed, with the 10-year and three-year yields at 1.80 percent and 1.47 percent respectively, Korea exchange prices show.

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