The won rose against the dollar on Monday, helped by reports that EBay Inc has agreed to buy a controlling stake in a South Korean retailer for $413 million. The currency received further support as the South Korean central bank said it would roll over only part of its $3 billion in loans to local banks maturing on Thursday because domestic foreign currency liquidity had improved.
The won is expected to remain firm as hopes that the global economy may be over the worst are likely to keep investors appetite for riskier assets, especially South Korean ones, although the won may experience correction if global stocks turn lower, analysts said.
"The overall mood for the won is quite bullish. If we do not face a big negative factor, the won is expected to keep going to the 1,300 (per dollar) level," said Jeong My-young, a currency strategist at Samsung Futures Inc.
"The won may undergo some technical correction. But that would be just a short-lived and technical one." The currency was quoted at 1,328.9/0.1 versus the dollar as, compared with Fridays domestic close of 1,333.0. Earlier, the won weakened to as soft as 1,341.4 on dollar bids linked to local companies dividend payments to foreign shareholders.
Samsung Electronics Co Ltd paid some 409 billion won in dividends to foreign shareholders and KT&G Corp also provided 198 billion won to foreign investors on the day. But investors dumped dollars after a local internet news provider eDaily said EBay would buy a 34.2 percent stake in Gmarket Inc from its current top shareholder Interpark and the Korean firms chairman at $24 a share, citing unidentified sources.