Won’s slide could lead to drop in COLA

[unhappycamper]

Won’s slide could lead to drop in COLA
By Erik Slavin, Stars and Stripes
Pacific edition, Sunday, May 11, 2008

SEOUL — The South Korean won fell late last week to its lowest mark against the U.S. dollar since October 2005, meaning better purchasing power but a possible drop in cost-of-living allowance for servicemembers in South Korea.

Commercial South Korean currency markets finished at 1,044.7 won per dollar Friday afternoon, down slightly from Thursday but still a 14 percent rise since November.

Currency experts and economists attribute the won’s weakness to several factors.

Fears of a global economic downturn have led foreign investors to pull their money out of South Korea, lowering the won’s demand and value. Trade imbalance is another contributor.

South Korean President Lee Myung-bak now is advocating a weaker currency to make South Korean goods cheaper abroad in an effort to boost sales.


Rest of article at: http://www.stripes.com/article.asp?section=104&article=54700