Seoul's currency stabilization fund logs 18.9 tln won in cumulative losses

SEOUL, June 1 (Yonhap) -- South Korea's currency stabilization fund posted a cumulative loss of 18.9 trillion won (US$17.6 billion) as of last year amid higher borrowing costs needed to operate the fund, a government report showed Wednesday.
The amount is up from the 13.8 trillion won cumulative loss recorded at the end of 2009, according to the report submitted by the finance ministry to lawmakers.
The fund is intended to defend the nation's currency value from excessive external market shocks and eventually help stabilize the financial markets. It is financed by the government's issuance of currency stabilization bonds.
Last year alone, the government logged a 5.1 trillion won loss from its fund operation, the report showed.
The 2010 loss is attributed mostly to higher borrowing costs that exceeded investment returns, the report showed. A falling U.S. dollar also resulted in valuation losses, which came to 1.44 trillion won.
Meanwhile, outstanding currency stabilization bonds issued for the fund operation stood at 120.63 trillion won at the end of last year, up from the previous year's 104.9 trillion won, the report showed.
kokobj@yna.co.kr