Korea’s Won Weakens After BoK Keeps Rates Unchanged

The South Korean won declined today on the renewed fears of the European sovereign-debt crisis, while the Bank of Korea refrained from increasing its interest rates.

The BoK kept its repurchase rate unchanged at 3.25 percent for the sixth month. Such move was expected by economists. The central bank will refrain from raising the borrowing costs for some time, according to some market analysts.

Most Forex commentators agree that the monetary policy decision wasn’t the reason for the won’s decline. The uncertainty about Europe is what really moving the South Korean currency, as well as most other currencies. Therefore, today’s meeting of the European Central Bank will likely have greater impact on the South Korean currency than the meeting of the central bank of South Korea itself.

USD/KRW advanced from 1,127.4000 to 1,132.1500 today as of 9:57 GMT.

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