2 days ago
Corporate Dollar Deposits Hit Record as Korean Won Strengthens
South Korean companies are holding more U.S. dollars in their bank accounts than ever before.
This happened while the Korean won became stronger against the dollar.
Five large banks reported a combined $76.98 billion in corporate dollar deposits.
Exporters are receiving dollars but waiting before changing them into won.
Importers are buying dollars gradually to pay for goods.
People are also buying dollars because the exchange rate became more favorable.
Some individuals want dollars to invest in U.S. stocks.
The amount of won exchanged for dollars at the five banks also increased in the first days of the month.
Dollar deposits at five major South Korean banks reached US$76.98 billion as of Thursday, the highest since data collection began in May 2021.
The Korean won traded at 1,345 won per U.S. dollar on Friday, its strongest level since October 8, 2024.
The won has strengthened by 254.2 won from its record low of 1,588.2 won per dollar on July 1.
Exporters are holding proceeds in dollars while importers are buying U.S. dollars in installments, according to a Shinhan Bank economist.
Individuals are also buying dollars after the won’s recent strengthening, including for investment in U.S. stocks, an NH NongHyup official said.
- Who
- Companies and individuals using five major South Korean banks, including exporters and importers.
- What
- Corporate dollar deposits reached a record US$76.98 billion as the Korean won strengthened.
- Where
- At KB Kookmin, Shinhan, Hana, Woori and NH NongHyup banks in South Korea.
- When
- In September; the deposit figure was measured as of Thursday, and the exchange rate was cited for Friday.
- Why
- Exporters are delaying conversion of dollar proceeds, importers are buying dollars in installments, and individuals are purchasing dollars for exchange or U.S. stock investment.
Key facts
- Corporate dollar deposits
- US$76.98 billion at five major South Korean banks
- Data record
- Highest level since banks began compiling the data in May 2021
- Won-dollar rate
- 1,345 won per dollar as of 10:30 p.m. Friday
- Previous exchange-rate comparison
- The won’s strongest level since 1,344.6 won per dollar on October 8, 2024
- Record low cited
- 1,588.2 won per dollar on July 1
- Early-month exchange volume
- US$60 million exchanged from won to dollars during the first three days of the month
- Five banks
- KB Kookmin, Shinhan, Hana, Woori and NH NongHyup
Quotes
Baek Seok-hyun
Economist at Shinhan Bank's S&T Center
“Dollar deposits are growing as export proceeds come in, while exporters delay exchanging them to the Korean won. Import companies are also actively buying the U.S. dollar in installments”
thehansindia.com
NH NongHyup bank official
Official from NH NongHyup bank
“Individuals are buying dollars since the won-dollar exchange rate fell in July and August. Demand for the dollar to invest in U.S. stocks has also risen”
thehansindia.com
Sources
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