Exchange Rate Falls to 1,470 Won Range... Authorities Say "Offshore Bets on Weakening Won Also Easing"

Authorities Meet with Seven Major Export Companies
Urge Conversion of Export Proceeds into Korean Won

The government has assessed that the supply-demand imbalance in the foreign exchange market is improving, as some of the offshore movements betting on the inflow of dollars from SK hynix's U.S. listing and a decline in the value of the won have eased.

On July 22, the Ministry of Economy and Finance announced this after holding a meeting with export companies regarding the foreign exchange market, chaired by Vice Minister Heo Jang, the previous afternoon. Seven export companies attended the meeting, including Samsung Electronics, SK hynix, Hyundai Motor and Kia, HD Korea Shipbuilding & Offshore Engineering, Samsung Heavy Industries, and Hanwha Ocean.

Vice Minister Heo evaluated, "Right before the export companies' meeting in June, the exchange rate rose to the 1,550 won level, but supply-demand imbalance has somewhat relaxed in a short period, as export companies sold off dollars (negotiation selling), shipbuilders' forward selling, and the inflow of funds from SK hynix's ADR issuance have recently brought the rate down to the high 1,400 won range."

He further analyzed, "The dollar buying trend among offshore investors, which had been expanding in anticipation of a weaker won, is also easing to some extent."

The previous day's KRW-USD exchange rate closed at 1,473.4 won (as of 3:30 p.m.), down 5.0 won from the previous session, marking six consecutive trading days of decline. During the session, it dropped to as low as 1,471.1 won, the lowest level in two months since May 11 (1,465.6 won).

The government expects that foreign currency supply and demand will improve further in the second half of the year, driven by the continued strength in the semiconductor sector. Vice Minister Heo emphasized, "Despite lingering external uncertainties, such as the ongoing Middle East war, the government's commitment to quickly stabilize the growing market confidence is unwavering," and added, "We have sufficient capacity to respond to ensure market stability."

He also urged, "We request that key exporters play an active role in converting export proceeds and foreign currency deposits, and in expanding the repatriation of funds held overseas into Korea, in light of the changed foreign exchange market conditions."

The participating companies agreed that stability in the foreign exchange market is foundational to alleviating uncertainty in management environments and establishing stable bases for investment and operations. They also pledged to cooperate in stabilizing foreign currency supply and demand, so that the recent trend of improvement in supply-demand clearly takes root as a steady factor in market stability.

This content was produced with the assistance of AI translation services.