The South Korean won fell more than 1 percent against the dollar on Friday, prompting the authorities to issue warnings and sell dollars to defend the currency just as inflation looks set to gain further. The won ended the local session at 1,027.8 per dollar, down 1.1 percent from Thursday's domestic close of 1,016.5, after hitting a one-month low of 1,028.0.
A senior Finance Ministry official said the government would take action to correct "excessive one-way bets" against the won, which he said were not desirable. Dealers said the authorities were believed to have sold dollars for won throughout the day.
"Dollar sales by authorities today did little more than slow the pace of the won's decline, rather than turning the mood around," said a domestic bank dealer. The dollar's global strength against major currencies, worries about the slowing South Korean economy and a slight rebound in oil prices all combined to dent the won.
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