Won closes at 1,348.8 won to dollar

The Korean currency rallied strongly toward the 1,350 won mark to the U.S. dollar Monday, recording an increase of more than 20 won at one point.

According to foreign exchange authorities, the won closed at 1,348.8 won to the dollar, up 21.3 won from last weekend. Officials said the figure marks the highest closing price since Oct. 14, 1998.

As the Korean currency continued its steep slide, a high-ranking official of the Finance and Economy Ministry made a verbal intervention, saying, ``Foreign financial institutions and investors showed a positive view of the Korean economy by lowering interest rates on short-term bank loans and foreign exchange stabilization funds.`` ``I think the market is reacting too sensitively to the recent downfall of the Japanese yen, which I find desirable,`` he said.

A dealer at a commercial bank said, ``As the yen continues to fall against the dollar, investors expect that the won will shed more of its value and they are refusing to sell them on the market. The government`s verbal intervention makes no difference in the market.``

Lee Byong-Hee amdg333@donga.com