South Korean Won Gets Backing From Australia(WSJ  3월3일자 기사)

 As negative interest rates make the euro and yen less attractive, one big bank is making a bet on the South Korean won. That bank is Australia’s central bank. And its move could be a bet that negative interest rates will be around for a while.

The won got its endorsement when the Reserve Bank of Australia said on Tuesday that it will invest 5% of its $50 billion of foreign-exchange reserves in the won. That shift came at the expense of the RBA’s euro holdings, whose share of the balance sheet has fallen.

In the past few years, the bank also has reduced its yen exposure.

While 55% and 20% of the Australian central bank’s reserves remain in U.S. dollars and euros, respectively, the won’s 5% will elevate it to the same levels as the British pound, Japanese yen, Canadian dollar and Chinese yuan. That gives the South Korean won a boost in status.

Because the RBA doesn’t engage in foreign-exchange intervention to prop up or push down the value of the Australian dollar, these reserves are unlikely to get used. Countries from China to Saudi Arabia dip into reserves to affect the value of their currencies. It may, though, help Australian officials make their balance sheet more attractive. The RBA couldn’t be reached for comment.

The “investment will further diversify the Bank’s foreign currency reserves,” it said in a statement Tuesday. Japan, the eurozone and several small European nations have turned to negative interest rates in part to put pressure on their currencies, many economists say.