Korean won at 11-month low as foreigners dump $6.1 bn in stocks this week

The South Korean won tumbled to a near 11-month low as foreign investors dumped $6.1 billion in local stocks this week much more than their total selling in the entire July.

The won skidded 0.7% to 1,169.5 against the dollar on Aug. 13, the weakest since Sept. 29, 2020. The South Korean currency closed the local currency market at 1,169 to the US unit, also the softest since then.

Foreign investors dumped a net 2.6 trillion won ($2.2 billion) in Seoul shares, extending their selling spree to the fifth consecutive session and pushing down the main Kospi to the lowest since late May, according to the Korea Exchange data. They sold a net 7.2 trillion won ($6.1 billion) worth of stocks this week, far more than a 4.9 trillion won sale in the whole of July.

Foreign investors’ concerns grew over increasing COVID-19 infections. The number of new infections remained around 2,000 after hitting a record high of 2,223 on Aug. 11.

Samsung Electronics Co. and SK Hynix suffered more on forecast that chip demand could peak in the fourth quarter. Foreigners unloaded a combined net 5.6 trillion won worth of Samsung and a net 2 trillion won in SK Hynix this week, the Korea Exchange data showed.

The Federal Reserve is predicted to scale back its massive asset purchase program, lifting the dollar and hurting the won.

The South Korean currency may weaken further, probably to as soft as 1,185 against the dollar, given rising COVID-19 cases and expectations of the Fed tightening, a Hana Bank analyst Seo Jung-hun forecast.

Write to Ik-Hwan Kim at lovepen@hankyung.com
Jongwoo Cheon edited this article.