Rising Dollar Balances and Increasing MMDA... 'Corporate Deposit' Money Move Pauses

Analysis of Corporate Deposit Trends at the Five Major Banks from January to September

Companies Flush with Cash: Dollar Deposits Rise for Six Straight Months
Won Deposits Also Remain at Record Highs This Year
Short-term Funds Shifted to Time

This year, as exports continue to reach all-time highs, it has been observed that corporate deposit balances have also increased significantly. Dollar-denominated deposits have been growing for six consecutive months, reaching record-breaking levels, while Korean won deposits also remain higher than last year. The movement of funds into time deposits, which had accelerated due to the interest rate hike cycle, seems to have paused this month. However, with commercial banks continuing to raise time deposit rates, there is still the possibility of further fund movement.

Corporate Dollar Deposits Remain in the $60 Billion Range for Two Consecutive Months... This Year's Increase Nears $10 Billion

According to financial industry data on September 23, the balance of corporate dollar deposits at the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) stood at $62,239.92 million as of September 17, up $1,298.06 million from the end of the previous month. Although this increase is smaller than the $6,440.75 million rise recorded in August—the largest so far this year—dollar deposits have still maintained six consecutive months of growth since April.

As of September 17, the balance of corporate dollar deposits was the highest ever, even when compared to end-of-month figures since May 2021, when aggregate statistics for the five major banks became available. Compared to the end of last year, the balance has increased by $9,823.49 million in just over nine months, nearing a $10 billion increase. Given that the annual growth in dollar deposits was just over $1.2 billion last year, corporate dollar funds have surged dramatically in 2026.

Industry experts attribute this to a combination of exchange rate trends and robust export performance. In the first half of this year, as the KRW-USD exchange rate soared to around 1,500 won, export companies were reluctant to convert their dollar earnings into won. Since July, after the exchange rate dropped to the 1,300 won range, companies have been holding off on currency conversion as well. In addition, with export figures exceeding $90 billion for three consecutive months—a record—corporate dollar earnings themselves have risen sharply. Import companies, on the other hand, have started securing dollars in advance at the lower exchange rate for future transactions, further driving up dollar deposit balances.

Corporate Korean won deposits, including Money Market Deposit Accounts (MMDAs) and time deposits, have also increased sharply this year. The corporate time deposit balance reached KRW 564.5804 trillion, up KRW 75.7919 trillion compared to the end of last year, hitting a record high. For MMDAs, which are considered short-term funds, the balance has exceeded KRW 100 trillion for eight out of nine months this year, excluding only in January. A financial industry official stated, "Compared to last year, the size of both corporate dollar and Korean won deposits has increased."

Shift from Short-Term Funds to Time Deposits Slows This Month...MMDA Returns to Growth After Four Months

The move of funds into time deposits—which had been spurred by interest rate hikes—slowed somewhat this month.

As of September 17, corporate MMDA balances stood at KRW 111.7864 trillion, an increase of KRW 6.961 trillion from the end of last month, marking the first rise in four months. In contrast, the increase in time deposits amounted to just KRW 4.6421 trillion during the same period.

MMDA accounts, known as "corporate parking accounts," offer flexibility for withdrawals and deposits but have a basic interest rate in the 0% range. In contrast, time deposit rates have risen to the high 2% to low 3% range annually after base rate hikes. As a result, from June to August, KRW 61.2344 trillion flowed into time deposits, while KRW 29.2652 trillion exited MMDAs, indicating active fund movement. It is interpreted that, due to robust exports and surplus funds, companies have shifted idle short-term funds into time deposits in line with rising rates.

This month, the slowed movement of funds is attributed to companies having already completed a round of fund shifts during previous interest rate hikes by banks. Now, they are taking a wait-and-see approach to observe the future direction of the base rate and bank deposit rates.

However, as Hana Bank followed KB Kookmin Bank and Woori Bank in once again raising time deposit rates, there is a possibility that such fund movements will regain momentum. Earlier this month, all five major banks raised deposit rates simultaneously, and in just over ten days, from September 21 to 22, the three banks mentioned increased their annual time deposit rates to the 3.4% to 3.5% range.

An official from the banking sector explained, "With the base rates rising in both Korea and the United States, market interest rates are jumping, and the need for stable fund sourcing is growing. As a result, banks are also adjusting their interest rates on deposit products. The trend of deposit rate hikes is likely to continue for the time being."

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