Korean won drops to 1,270 won to U.S. dollar

The Korean won continued its slide against the U.S. dollar on Tuesday, the first day of the New Year, hitting the 1,270-won level.

In the foreign exchange market, the local currency closed at 1,276.40 won to the dollar, up 11.9 won from the end of last year. It is the lowest level in 25 months since Nov. 19 in 1998, when the won traded at 1,287 won.

Once in the morning trade session, the won climbed to 1,258.5 won to the dollar after exporters dumped about $200 million, but it soon took a steep downward course in the afternoon as oil refineries and companies joined some outside forces buying dollars to settle their accounts. The won hit 1,277.5 won at one point in the day.

A foreign exchange dealer predicted that the won`s depreciation would continue for the time being as most market players expect the Korean won currently to dip to as low as 1,300 won to the dollar sooner or later.

Hong Chan-Sun hcs@donga.com