Won-Dollar Exchange Rate Falls to 1,430 KRW for First Time in 5 Months on Fed Rate Freeze, SK hynix ADR Inflow

Lowest Weekly Close Since February 26

The won-dollar exchange rate has fallen to the 1,430 KRW range for the first time in five months. This decline is attributed to two main factors: the inflow of SK hynix American Depositary Receipt (ADR) funds into Korea since mid-July, and downward pressure on the exchange rate due to the U.S. Federal Reserve (Fed) leaving interest rates unchanged.

At 3:30 p.m. on July 30 in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,437.4 KRW, down 9.3 KRW from the previous trading session’s weekly closing price. Based on weekly closing prices, this marks the lowest level in about five months, since February 26 (1,425.8 KRW).

On this day, the exchange rate fell as low as 1,435.9 KRW at 9:16 a.m., rebounded to 1,477.7 KRW at 10:41 a.m., and then dropped back into the 1,430 KRW range. In terms of intraday lows, it is the lowest since February 27 (1,430.5 KRW).

The Fed’s decision to keep its benchmark rate unchanged is cited as a key reason. The Fed maintained its policy rate at an annual 3.50% to 3.75% at the Federal Open Market Committee (FOMC) meeting held on July 28-29 (local time).

Although three members supported a rate hike, following a statement from Fed Chair Kevin Warsh after the June FOMC that identified a tightening stance due to rising Treasury yields, the market now expects any additional tightening to be limited in scope.

Other major factors contributing to downward pressure on the exchange rate include the inflow of SK hynix ADR funds into Korea and U.S. dollar sales by exporters at the end of the month.

Net buying of domestic stocks by foreign investors also contributed to lowering the exchange rate. Although the KOSPI index closed at 5,593.56, down 69.68 points from the previous day, foreign investors net purchased stocks worth 1.3403 trillion KRW in the Korea Exchange on this day.

However, the won-dollar exchange rate is expected to face new challenges around mid-August, when the inflow of SK hynix ADR funds ends.

Park Hyung-joong, economist at Woori Bank, predicted, "After mid-August, factors such as the supply and demand situation among foreign investors, the trend of increased overseas investments by Korean residents, the Fed’s future monetary policy decisions, and inflation levels will become important factors affecting the won-dollar exchange rate."

The Korea Composite Stock Price Index (KOSPI) started the day at 5,681.77 points, up 18.53 points from the previous trading day, displayed on the electronic board showing the domestic stock market status in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul, on the 30th. 2026.7.30 Photo by Jinhyung Kang

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