The South Korean won rose 0.7 percent to a 10-day high against the dollar on Monday, despite losses by its regional peers, as diminishing worries about a global credit crunch boosted investor appetite for risk.
It also found some support after President Lee Myung-bak's remark over the weekend that containing inflation was a more urgent task than lifting economic growth dampened expectations that local interest rates would be lowered soon. The won ended local trade at 997.1/7.4 per dollar after rising to as high as 995.9, its strongest since March 14, compared with the previous closing bid of 1,002.9.
"The mood is for the won to stay firm for the time being, but the actual dollar sales are weak and sporadic (dollar) purchases by oil refiners to settle import bills are also limiting the won's gains," said a foreign bank dealer.
The Seoul currency's strength contrasted with modest drops by its regional peers against the US unit, such as the Singapore dollar, and follows its slump to a 27-month high a week ago.