Korean Won Top Performer Among Major Currencies

The South Koran won was the best performer among major currencies last month, global data showed Monday, adding to worries about its negative impact on exports. 
According to real effective exchange rate (REER) indices compiled by the Bank for International Settlements (BIS), the won rose 2.64% on-month to 116.93 against the US dollar in July, the fastest gain among the currencies of 27 leading economies. Those of Australia and Japan came second and third with a 2.6% and 1.68% advance, respectively. 
The won's rapid appreciation is mainly attributable to the possibility of a delay in the US Fed's rate hikes, analysts said, according to (Yonhap) news agency. 
Standard & Poor's (S&P) also raised South Korea's sovereign rating by one notch earlier this month, helping expand the inflow of foreign capital into Asia's fourth-largest economy. 
But concerns are mounting that it's undermining the country's already-shrinking exports. 
Its exports fell 10.2% last month from a year earlier, marking the 19th consecutive month of decline. 
"The price competitiveness of exporting firms is worried to weaken due to the won's strength," Lee Chang-sun, a senior researcher at LG Economic Research Institute, said. 
The BIS has been monitoring the REERs of different countries every month by setting 2010 as its base year. The base was set at 100, with a rise meaning an appreciation of the national currency adjusted by relative consumer prices. 
South Korea's REER for July is the highest since it posted 119.21 in December last year. 
In the wider REER data to cover 61 economies, South Korea ranked 7th following Venezuela, South Africa, Brazil, Chile, Russia and Malaysia. 

Source : QNA