SEOUL: The South Korean won inched higher on Wednesday as fears over military conflict in the Ukraine ebbed, but robust dollar demand by importers capped gains amid China's announcement of its annual growth target and pledges on reform.
The local currency was quoted at 1,071.4 against the dollar as of 0242 GMT, up 0.2 percent compared with Tuesday's closing level of 1,073.5.
Amid delivering a robust defence of Russia's actions in Crimea, President Vladimir Putin on Tuesday said he would use force in Ukraine only as a last resort, easing some concerns which brought risk taking back into play.
The benchmark Korea Composite Stock Price Index was up 0.9 percent at 1,971.73 points.
China, South Korea's largest export market, set its annual growth target at 7.5 percent, matching market expectations,
while pledging to continue with exchange rate reforms and extend the yuan's floating rate.
Such exchange rate reform is seen widening the band for the renminbi, which has sharply depreciated against the dollar in the past several weeks, pressuring regional currencies to join the downward trend given China's economic influence.
Dealers also pointed out that a spike in dollar demand before pending payments to Iran for crude oil imports could further limit the won's rise.
"The won-dollar rate is showing strong resistance at the 1,068 level, adding to speculation of hefty dollar-demand. It could be the Iranian payment, as dollar purchases should start today if the payment is set for Friday," a foreign bank dealer said.
Bank sources confirmed that money transfers to Iran for crude oil imports would be made by two Korean banks in early and late-March.
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