S. Korean Currency Jumps 2.9% Against Dollar

The South Korean currency jumped 2.85 percent against the U.S. dollar Monday on suspected intervention by foreign exchange authorities to boost the won's year-end value, Yonhap News reported.

The local currency closed at 1,263 won to the greenback, up 36 won from Friday's close, after jumping as high as 1,260 won at one point. Daily trading volume reached $3.36 billion.

The Korean won rose for the third straight session with its value declining about 26 percent to the dollar so far this year.

"Market players remained cautious against any possible dollar sale intervention during the session," said Shin Jin-ho, a currency analyst at Woori Futures Co. "But some hunted for bargains on expectations that the won may lose its value after the end of the year."

Local banks and firms are closely watching the won's movement toward the end of the year as their foreign currency denominated debt would be assessed on their books in accordance with the won's value Tuesday, the last trading day of this year.

South Korea's smaller firms have been suffering from losses related to currency options known as "knock-in knock-out (KIKO)" contracts, as the won's steep losses to the dollar have led to snowballing losses.

The benchmark Korea Composite Stock Price Index (KOSPI) edged down 0.02 percent to 1,117.59, limiting the won's gain during the session.