South Korea’s won led gains in Asia this week as policymakers pledged to bolster the currency and tame inflation.
The won’s 4.8 percent gain this week, the most since March 1998, made it the world’s best performer. South Korean Finance Minister Kang Man-soo this week announced the government would tackle risks stemming from oil costs and inflation, while Bank of Korea Governor Lee Seong-tae said the bank may intervene if necessary because the currency market “overreacts.” Six out of the 10 most-traded currencies in Asia outside of Japan rose this week.
South Korea’s currency traded at 1,002.30 against the US dollar at the 3pm close in Seoul on Friday, from 1,002.90 a day earlier, Seoul Money Brokerage Services Ltd said.
The currency rallied, trimming this year’s loss to 6.6 percent, as South Korean President Lee Myung-bak dismissed the nation’s currency policy chief, signaling the end of his support for a weaker won. Industrial Bank of Korea estimated the government sold as much as US$7 billion on Wednesday alone to shore up the won.
The New Taiwan dollar was little changed at NT$30.392 on Friday versus NT$30.401 on July 4, while Thailand’s baht declined 0.4 percent to 33.65.
Elsewhere, the Singapore dollar added 0.3 percent this week to S$1.3588 against the US currency, Indonesia’s rupiah advanced 0.6 percent to 9,162 and Vietnam’s dong rose 0.03 percent to 16,841.50.
Malaysia’s ringgit climbed on speculation investors will shun the US dollar as the prospect of widening credit-market losses gives the US Federal Reserve less room to raise interest rates.
The ringgit logged its first weekly gain in three after US stocks entered a bear market this week for the first time since 2002.
The ringgit traded at 3.2440 per dollar late on Friday compared with 3.2465 a day earlier, according to data compiled by Bloomberg. The currency has risen 0.7 percent this week.
The Philippine peso declined for a third week on speculation higher oil costs will stoke inflation and spur demand for the US currency to meet the cost of fuel imports.
The peso fell 0.5 percent this week to 45.662, according to Tullett Prebon PLC.
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