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Volatility in S.Korean forex market hits 27-month high on U.S. protectionist move
Last Updated: 2018-07-12 13:45 | Xinhua
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Volatility in the South Korean foreign exchange market hit a 27-month high last month on rising worry about U.S. protectionist moves, central bank data showed Wednesday.

Standard deviation in the won/dollar exchange rate was 19.1 won per U.S. dollar in June, posting the highest since March 2016, according to the Bank of Korea (BOK).

The standard deviation means how far away the daily market close deviates from the monthly average won/dollar exchange rate.

The high volatility was attributed to U.S. protectionist moves that triggered concern about the weakening of global trade. South Korea was forecast to be hit hard as the economy depends heavily on exports for economic growth.

The widening gap between policy rates of South Korea and the United States also contributed to the higher volatility in the foreign exchange market of South Korea.

The U.S. Federal Reserve raised its benchmark interest rate in June to a range of 1.75-2.00 percent, while the BOK refrained from altering its policy rate from the current 1.50 percent since November last year.

Foreign investors offloaded local stocks worth 640 million U.S. dollars in June, while purchasing 1.91 billion dollars of domestic bonds amid the low interest rate.

Premium for the country's five-year credit default swap averaged 45 basis points in June, up 2 basis points from a month earlier.

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