South Korea’s Woori Bank said yesterday it hoped to borrow US$300 million overseas to strengthen its foreign currency holdings.
Woori, the country’s third largest lender, “is in talks with a European bank” to borrow US$100 million for one year, a spokesman said.
STABLE LIQUIDITY
“The deal will help our bank secure stable foreign currency liquidity,” he said.
Woori also hopes to borrow US$200 million from an unspecified US bank over two years and talks are under way, the spokesman said.
Local banks are struggling to expand their capital base after jitters over their liquidity shook financial markets.
Hana Bank, the country’s fourth-largest lender, said it would consider floating US$500 million in state-guaranteed overseas bonds.
Yonhap news agency said provincial lender Busan Bank would borrow US$200 million from Calyon Bank and other European lenders.
South Korea’s total foreign debt stood at US$380.5 billion at the end of last year, including US$171.7 billion owed by the banking sector, central bank data showed.
South Korean Finance Minister Yoon Jeung-hyun last week rejected concerns over foreign debt repayments.
He said foreign exchange reserves were more than US$200 billion and the country had reached currency swap deals with the US, Japan and China worth a total of US$90 billion.
SHARES CLOSE HIGHER
Meanwhile, South Korean shares closed 1.58 percent higher yesterday as the strengthening won boosted investor sentiment, dealers said.
The KOSPI index gained 16.7 points to 1,071.73. Volume was 450.4 million shares worth 3.4 trillion won (US$2.2 billion).
“The local currency’s movement is an important key in explaining the local stock index’s recent trends,” Bae Sung-young, an analyst at Hyundai Securities, told Yonhap news agency.
The bourse saw choppy trading, mirroring the won’s movements.
The local currency, which rose as high as 1,536.7 to the US dollar at one point, reversed course in the morning session. But it ended at 1,549 won, up one won from Friday’s close, as exporters unloaded the greenback.
Analysts say investors largely remain cautious as downbeat economic data and renewed geopolitical risks weigh on market sentiment.
South Korea and the US kicked off a joint annual military exercise yesterday amid fears that North Korea may test-fire a long-range missile.
“If North Korea launches what it claims is a satellite, the market will be dented in the short term. But given the track record related to North Korean news, its impact may be limited over the long haul,” said Lee Woo-hyun, an analyst at KTB Securities.
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