The Son of Finance of the Great Age

  Chapter 322 Reaction of the Bank of Korea

  Andrew has been very busy recently. After he published a TV commentary on the Hong Kong market, he was frequently invited by his peers to communicate in name, but in fact to inquire about the news about "the international hedge fund is about to launch an attack on the Korean won".

   Naturally, all of this was carried out under the behest of Zhong Shi. According to the original historical process, international hot money will soon launch an attack on the Korean currency. Jong-seok’s plan is that instead of letting international speculators earn the profits after the devaluation of the Korean currency, it is better to let Hong Kong’s capital earn, or earn a part of.

Although it is not clear what the international speculators are doing, Jong-seok can already make a sign of himself. After all, he holds Korean currency worth about 5 billion U.S. dollars. There are not small fluctuations in the short term, and after this kind of fluctuation is analyzed and amplified by interested people, it may eventually evolve into a rumor that can affect the market.

"return!"

Seeing that Andrew was shaking his head and preparing to leave, Zhong Shi yelled in time. Seeing Andrew turned his head and turned around, he asked, "How is the result of your 'public relations' these two days? Why don't you report to me, the big boss?" Fan?"

"Hey!" Andrew said with a long sigh, "They are all characters who don't see rabbits and don't scatter eagles. They don't believe what I say. I feel like a clown, and I almost dry my saliva when I speak. They only said to think about it one by one, and never gave a clear answer, I wondered if I was communicating with aliens!"

   After speaking, Andrew sighed again, picked up the cigarette case and sat opposite Zhongshi, took out a cigarette from it, and smoked sullenly.

  Zhong Shi smiled, but didn't say anything. Of course, he is well aware of these people's concerns. When it comes to money matters, they will naturally be more cautious and careful. Although Andrew is famous, the market does not operate according to his comments in a few words.

After bowing his head and thinking for a while, Zhong Shi knocked on the table and said: "Let the wind out, say that the Korean won will depreciate recently and fall below the psychological barrier of 970. If anyone still has doubts about this, then they will lose money." This is an opportunity to short Korean won, you just let them go!"

   "970?"

Andrew tilted his head and thought for a while. The recent Korean won exchange rate fluctuated around 960. He didn't know the exact amount, but since Zhong Shi said so, it meant that he had already made up his mind, so he nodded immediately and took a sharp puff. Cigarettes, put the rest into the ashtray, nodded and walked out with a big head.

  …

  On November 6th, as soon as the Asian trading session started, there was an unusual situation in the Hong Kong dollar market.

  Large US-funded enterprises in Hong Kong and some banks sold three-month forward exchange rates of the Hong Kong dollar, causing the overnight lending rate of Hong Kong dollar banks to continue to fall. However, the lending rate for more than one month has increased significantly, from 0.95% to 1.1% (monthly interest rate). The banking circles are still suspicious of international speculators speculating on Hong Kong dollars again.

In the London foreign exchange market the night before yesterday, Hong Kong exchange three-month forward contracts were traded frequently and the lot size was relatively large. Because Hong Kong dollar banks need to consider the delivery of these forward contracts, they hoard some cash to meet contingencies. This is The reason why the long-term lending rate rises.

   In New York, the number of similar forward contracts is not too many, which shows that the consortium selling the Hong Kong dollar is very likely to come from Europe.

  Although the Hong Kong dollar has successfully weathered the previous crisis, the sudden appearance of selling orders worth hundreds of millions of dollars in the market still makes the market sweat. Although the Hang Seng Index opened higher on this day, due to the influence of many factors such as the rise of long-term lending rates, the rise of housing loan interest rates, and the decline in housing prices, it began to fall after the opening. It closed at 10,412 points, down 269 points. A drop of 2.52%.

  Although the Prime Minister of Thailand announced that he was about to resign, which brought a lot of benefits to the market, the market soon focused on what happened after Chawa was established, that is, the successor of the Prime Minister. The baht edged lower in Asia due to the large number of candidates and concerns about the king's health.

  Other markets such as the Indonesian rupiah and the Philippine peso, due to the impact of the continuous rise in the Indonesian rupiah, traded slightly higher on this day, but not too much. After all, it has been a while since the IMF announced the rescue of Indonesia, which is enough for the market to digest the relevant news.

   All these changes in the currencies of Southeast Asia are just minor issues, and the market focuses more on the Korean won.

  Compared with the strengthening of currencies in Southeast Asia, the Korean won has continued to fall recently. Even if the IMF announced the implementation of assistance to Indonesia and other countries, the selling of the Korean won in the market has not stopped.

   Just as the Asian session opened on this day, the won fell to 969.80 won to 1 US dollar. Compared with 968.50 at the close of the previous day, this drop was quite astonishing. It once rebounded during the session, but at noon, there was a sudden large-scale selling of Korean won in the market, the amount reached an astonishing 970 billion won, breaking through the psychological barrier of 970 points almost instantly.

  Faced with such a large-scale sell-off, the Central Bank of Korea has no choice but to intervene in the market. According to today's exchange rate, these Korean won are about 1 billion U.S. dollars. You must know that in the Seoul stock market, sometimes even the daily transaction volume does not even reach half of this figure.

  Similarly, faced with such a large amount of selling orders, the Bank of Korea also made a decisive move. As rating agencies such as Standard & Poor's lowered the credit rating of Korean companies, it made it difficult for the Korean banking industry to raise funds overseas, and it also greatly increased the demand for US dollars in the Korean banking industry. This demand can only be carried out through operations in the foreign exchange market. Therefore, If the Korean won continues to fall, it will be more expensive for them to raise dollars.

Under the double buying by the Central Bank of Korea and the Korean banking industry, the exchange rate of the Korean won did not fall sharply due to the large-scale selling of the Korean won in the market. Finally, when the selling amount was fully digested, the exchange rate of the Korean won was fixed at 974.95 level, down 1.3%, setting a new low in recent times.

  …

   Park Hee Rae is very angry, he has enough reasons to be angry!

  In his view, the $1 billion sell-off in the market is definitely a good thing done by a Korean consortium. For this behavior of dismantling the backstage of the central bank, Park Xilai was furious!

  Because of China's recent interest rate cut, and China is South Korea's largest trading country, the Korean won swept the previous decline in the market after hearing the relevant news, and it really cheered up for two days. But it didn't take long for the Korean won to turn around and fall again, and the decline was even worse than the previous market performance.

As the governor of the central bank, Park Hee-rae naturally has his own news channel. According to the news he got, after the South Korean won was stimulated by China's interest rate cut, some consortiums in South Korea immediately exchanged the Korean won on hand into dollars, and then For two days, they continued to sell in the market to earn the exchange difference.

  As for international hot money, which is regarded as the number one threat, his source did not give a clear answer, but according to his judgment, there is no large-scale Korean won selling behavior or expectation in Europe and the United States.

  According to Park Hee Lai's conservative estimate, they took away at least 300 million USD in exchange rate differences from the market in the past two days. These are all funds from the foreign exchange market. Park Hee Lai is not very distressed, but the problem is that due to their selling, the market has doubts about the performance of the Korean won in the short term, which leads to a further accelerated decline.

   Just imagine, how can foreign investors trust a currency that is not even trusted by domestic companies?

  Therefore, rumors about the financial crisis in South Korea, the capital flight of South Korean companies, and the depreciation pressure on the Korean won appeared in the market one after another.

   "Shiba, I really shouldn't have intervened in the market!" The anger turned into anger, and Park Hee Rae, who had calmed down, had no way to change the current situation. Neither the Korean conglomerate nor the banking industry could be influenced by him.

  At this time, there was a man beside him, who looked about 30 years old, with single eyelids and small eyes, high cheekbones, sunken nose, thick lips, and protruding chin, a typical Korean face. His name is Xu Youtian, he is the director of the foreign exchange department of the Bank of Korea, and he is a loyal confidant of Park Hee Rae.

   Seeing Park Hee Lai with a slumped face, Xu Youtian shook his head imperceptibly, obviously disapproving of the boss's confusion. After pondering for a while, Xu Youtian carefully reminded: "Senior Park, now is not the time to pursue, today's unusual trading market is still waiting for us to give an answer! If we can't explain this behavior as soon as possible, I believe there will be more selling orders coming out later.”

"right!"

Park Hee Lae, who woke up like a dream, suddenly slapped the table and said loudly: "Shiba, why didn't I think of it? However, we can't talk about the sale of Korean won by the internal consortium in South Korea, and we have to make a reasonable explanation for the loss of the 970 price." An explanation can dispel the doubts of the market."

  Because the Korean won implements a daily fixed rate rise and fall system, the reference is not a fixed price, but the average price of the previous day. To some extent, the Korean won is a limited floating exchange rate system.

   But even so, for South Korea, it is still impossible to completely let it go. There must be a psychological price, that is, the exchange rate of Korean won to US dollar will not break through much. Although this price may not be made public, the market should have a consensus on it.

  Just like the 7.5 of the Hong Kong dollar, the 970 of the Korean won is indeed an important psychological barrier. When the Korean won broke through 970, the market was shocked, and then the selling increased significantly, which is a manifestation of lack of confidence. Park Xilai is naturally aware of this, but now he is trying to find an excuse to cover up this "important psychological threshold".

"Why don't we just say that our domestic currency is not about maintaining a certain price, but about observing the trend of the US dollar and the yen, so as to adjust our market." After thinking for a while, Xu Youtian's eyes lit up, and he came up with such a Say it.

Park Xilai repeatedly chewed on the words "the trend of the US dollar and the yen", and gradually his eyes lit up. The current financial crisis in Korean domestic enterprises was caused by the financial crisis of certain Japanese conglomerates. This statement is ingenious. It is indeed a clever way to divert the attention of the market to attribute the unusual depreciation of the Korean won to this aspect.

"Besides, we can also say that the market is over-exaggerating the theory that the Korean won's depreciation pressure is increasing due to the weak yen, because only a very small number of domestic companies in South Korea are involved in Japanese capital. At this stage, the South Korean currency It was just impacted by some speculators, and I believe it will return to normal levels soon." Seeing that Park Xilai adopted his suggestion, Xu Youtian added another paragraph while the iron was hot.

   "Okay!" Park Xilai patted his thigh, "That's it, let's get ready!"

  …

Shortly after the Asian session closed on November 6, an official of the Bank of Korea, who did not want to be named, expressed the above views to the outside world, and at the same time hinted that the South Korean government is seeking help from the International Monetary Fund. To a certain extent, it contributed to the rebound of the Korean won during the European and American trading hours. It's just that for the trading in Europe and America, the Korean won is obviously not the main trading product, and the trading volume and value are pitifully small, which can't have much incentive for the trading in the Asian time.

  Besides, whether the market believes the Bank of Korea's remarks is another matter!

   Thanks to book friends kissmedio, tokihikari, July Liu Yan, Hu Nushi, etc. for voting for monthly support!

  (end of this chapter)