(Updates to midday)
SEOUL, May 12 (Reuters) - The South Korean won slid against
the dollar on Tuesday after media reports that the Finance
Minister warned of government action to curb the local currency's
sharp gains and on weaker Seoul stocks.
The won KRW=, however, cut much of its earlier losses as
foreign investors kept buying local shares and on exporters'
demand for settlements.
Currency investors showed a muted reaction to the central
bank's decision to keep its benchmark interest rate at a record
low of 2.00 percent as the hold was widely expected.
[ID:nSEO141340]
The local currency was quoted at 1,241.6/2.1 per dollar as of
0250 GMT, compared with Monday's domestic close KRW=KFTC of
1,237.9. It earlier weakened to as soft as 1,253.7.
"The won follows equities closely lately. But there will
still be strong support for the won. Foreign investors will take
the opportunity to grab bargain South Korean shares. I would not
be surprised if the won actually closed slightly firmer," said
Daniel Soh, a currency strategist at FORECAST Pte Ltd.
Earlier, Yonhap news agency quoted Finance Minister Yoon
Jeung-hyun as saying the government would take action if the
local currency rose too fast. [ID:nSEO137478]
Seoul shares fell 0.66 percent while foreign
investors bought a net 23.8 billion won worth of stocks, after
purchasing a combined net 2.4 trillion won during the previous
seven sessions.
0250 GMT 0005 GMT prev close
Won KRW= 1,241.6/2.1 1,249.8/0.7 1,237.9
Yen/won JPYKRW=R 12.7514/17 12.7947/68 12.5731/87
KOSPI 1,405.78 1,408.49 1,415.16
(Reporting by Cheon Jong-woo; Editing by Jonathan Hopfner)
