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[wylies99]

Won, Rupee Will Shine in 2009, Moody�s Unit Forecasts
http://www.bloomberg.com/apps/news?pid=20601087&sid=aAIEzWfkt6gM&refer=home#


Dec. 23 (Bloomberg) -- South Korea�s won and India�s rupee, Asia�s biggest losers this year, will be the region�s biggest gainers from improved appetite for emerging-market assets and a recovery in the global economy, said Moody�s Economy.com.

They have the strongest potential to rebound,� Sherman Chan, an economist in Sydney with Moody�s Economy.com said in an interview. �Any recovery in risk appetite should see capital flowing back in. Investment growth is also expected to pick up when the global economy recovers late next year.�

Foreign investors have sold a net $37 billion worth of South Korean equities this year and the benchmark Kospi stock index has plunged 40 percent as credit losses prompted investors to hoard dollars. The won is Asia�s biggest loser among the region�s 10 most active currencies, plunging 30 percent against the dollar, while the rupee dropped 19 percent.

South Korea�s currency will rise 7.1 percent to 1,242 per dollar by the middle of 2009 and 11.4 percent to 1,185 by end- 2009, Chan said. India�s currency will average 49 to the dollar in the first half of 2009, compared with 48.85 today, before rising to 47 by the first quarter of 2010, Chan said.

The won weakened 2.3 percent today to 1,337.25 per dollar as overseas investors sold more local shares than they bought for the first time in five days on concern a global recession is deepening.

�We don�t think that recent dollar weakness would mark the beginning of a long-term trend,� Oh Suk Tae, an economist with Citigroup Inc. in Seoul, wrote in a note to clients today. �Global investors� risk appetite still seems still too weak.�

Dollar Shortage

The South Korean government has reached a tentative conclusion that the shortage of U.S. currency in local financial markets is over, Yonhap News reported yesterday. The central bank has used its currency-swap line with the Federal Reserve to provide dollars to local banks struggling to access funds.

�Korea�s economic fundamentals should see some substantial improvement in 2009,� said Han Sia Yeo, a currency strategist at Bank of America Corp. in Singapore. �The dollar shortage has been addressed with the swap lines. Exports have become very competitive with the cheap won.�

The currency will rise 10.3 percent next year to end 2009 at 1,200 to the dollar, Yeo said. A Bloomberg survey of 24 economists forecast the won to rise to 1,300 to the dollar by the end of 2009 and to 1,225 by the end of 2010.

Asia�s second-biggest loser this year, the Indian rupee, will also have strong potential to outperform, although most gains will be in late 2009 and early 2010, Moody�s Chan said. Moody�s Economy.com is a research unit of New York-based rating agency Moody�s Investors Service.

Top Pick

�India�s rupee is one of my top picks as the country has a strong domestic market with very strong growth potential,� Chan said. �It is one of the most attractive destinations for foreign direct investments with its large domestic market and a very well-educated workforce.�

The rupee will climb to 48 per dollar at end 2009, according to a Bloomberg survey of 26 economists.

India�s biggest challenge is to attract foreign capital to fund the shortfall between savings and investments, Bank of America�s Yeo said. He expects the currency to rise 7.7 percent against the dollar to end 2009 at 45. Foreign investors have sold more than $13 billion net worth of that nation�s equities this year.

Asia�s third-worst performer this year, the Indonesian rupiah, is Yeo�s �top pick� for next year. It may advance 10 percent to 10,000 a dollar by end-2009, from 11,050, he said.

Asia�s best performers this year may not repeat their strength in 2009, Moody�s Chan said.

China�s yuan, the best performer, will be �largely stable� as authorities seek to protect exporters while avoiding upsetting trade partners, Chan said. Singapore�s dollar, the third-best, will fall 5.4 percent to S$1.5300 per dollar by mid- 2009 as the central bank adopts a weaker currency policy, she said.

To contact the reporter on this story: Patricia Lui in Singapore at [email protected]

Last Updated: December 23, 2008 04:30 EST

[GoldMember]

Definition of an Economist:
Someone who tells you tomorrow why what they said yesterday, did not happen today.

[asylum seeker]

Or maybe not:

[mindmetoo]

A more accurate gauge of the fate of the Won. I'm planning to come to Seoul in May on holiday and spend a lot of money. So, assume the Won will rocket to new strength in time to foil my plans.

[call_the_shots]

So, to summarize:

End of 2009 predictions
Chan: 1185
Yeo: 1200
The Bloomberg 24: 1300
Oh Suk-tae: around 1300

So a 2.5M salary will be worth somewhere between $1923 and $2109.