Won Heading for More Losses

The South Korean currency is heading for more losses as the government is searching for ways to support the exporting companies and the economic growth.

The won is the second weakest major currency after the South African rand since the beginning of 2008 and is the first losing currency for March.

According to Citigroup’s analysis the Korean finance ministry will win with the Bank of Korea over the current monetary policy control. The finance ministry wants to depreciate the currency via the intervention in order to stimulate the economy, while Bank of Korea prefers a stronger won to fight the inflation.

Citigroup lowered its forecast for the Korean won rate against the U.S. dollar to 1,020 per dollar from the previous estimate of 920 per dollar. USD/KRW is trading at 991.36 as of 9:07 GMT.

The South Korean currency has already dropped 6.2% this year. A depreciation to 1,020 wons per dollar by the year end will mean a 9.7% yearly decline for the won.

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