The currency’s value rose by 10% against the US dollar, bouncing back from a 13-year low. Just this month alone, the won has strengthened against the dollar by 6%. It reached Won 1, 020 per US dollar on Friday, its strongest since August 2008.
Meanwhile, Geoff Kendrick, the FX strategist at Morgan Stanley, has forecast a won rally to W950/$, which would be the highest since January 2008. Its historic record level is W920/$, reached in December 2006.
This has not been the case in the past. At times the won has been among Asia’s worst-performing currencies, especially during the region’s financial crisis in the late 1990s. So what about the Korean economy that is making the won perform so well, and what can Nigeria learn from that country?
Front And Back Naira Banknote Samples; Top Row: 1000 Naira Banknote;...
Foreign investments: Portfolio investment has been a major factor guiding the win. In the past week, global investors have put $588m into Korean equity funds, according to data released on Friday by EPFR, the fund flow tracker, says FT.
Poor leadership: The right investment environment, reduction in policy flip-flop, and issues surrounding the repatriation of funds in Nigeria would attract much-needed investments and foreign exchange. These would strengthen the local currency.
The national coordinator-elect of the Independent Shareholders Association of Nigeria, Mr Moses Igbrude, told that the major problem with Nigeria’s currency is government policies. Igbrude said Nigeria would have no problem with the economy, except for the government.
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Dr Felix Echekoba, lecturer in the Department of Banking and Finance, Nnamdi Azikiwe University, Awka, said so much money in circulation is chasing fewer goods in Nigeria, which is a major cause of a weak naira. He said such a situation sparks inflation and weakens the currency especially when the economy is not reeling out commensurate goods and services.
According to Global Exchange Hong Kong, by 2006, many won banknotes in circulation were being falsified. Counterfeiting of the 5, 000-won note was such a big problem that it prompted the government to introduce a new series of banknotes with better security measures.
Security Features: The Korean currency now includes 3D holograms that change colour and watermarks with portraits. Newly minted coins also include a substance that makes them easy to detect against counterfeit coins.
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