SEOUL: The South Korean won was little changed in early domestic trade Tuesday, easing from a 28-month intraday high as a series of warnings from local policymakers about the currency's rapid appreciation unnerved investors.
The local currency was quoted at 1,052.9 against the dollar as of 0215 GMT, compared with Monday's domestic closing level of 1,053.0.
The won briefly traded as high as 1,051.0 against its US counterpart earlier in the day, its strongest level since Aug. 2, 2011, but concerns about potential intervention by local authorities weighed.
South Korean finance minister Hyun Oh-seok told reporters earlier on Tuesday that the government was closely monitoring the won's volatility.
This followed remarks by a local foreign-exchange official late Monday that South Korea will step in to curb excessive volatility and that authorities are watching to see whether there are signs of speculation among offshore investors.
Some dealers suspected that the local authorities intervened in the non-deliverable forwards market overnight to check the won's rise, adding to market caution.
"There isn't much activity among investors or other market participants making need-based transactions," one currency dealer said, adding that the dollar-won rate will be supported at 1,050 for the rest of the day.
Though local policymakers maintain that they are primarily focused on ensuring market stability, investors and analysts say that the foreign exchange authorities will also keep a close eye on the yen-won cross.
Continued depreciation of the yen against the local currency could undermine local manufacturers that compete directly with Japanese firms, and in turn weigh on the country's growth prospects.
The benchmark Korea Composite Stock Price Index was down 0.3 percent at 1,995.09
December futures on three-year treasury bonds were up 0.03 points at 105.54.
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