$20 Billion Repatriation: South Korea's FX Fund Buys Back SK Hynix Dollars

South Korea's Foreign Exchange Stabilization Fund has made significant purchases of repatriated US dollars from SK Hynix, the country's largest chipmaker. The fund bought approximately $20 billion in US dollars after SK Hynix sold its shares following a $26.5 billion American depositary receipt listing in July.

The Foreign Exchange Stabilization Fund made these purchases through over-the-counter transactions as SK Hynix repatriated the US dollars to South Korea. This move is different from traditional foreign exchange interventions and aims to stabilize market volatility while replenishing the country's depleted forex reserves.

South Korea does not officially disclose the exact asset breakdown or current size of its Foreign Exchange Stabilization Fund, which consists exclusively of US dollars and Korean won. However, market participants have speculated that the proportion of greenbacks within the fund has severely declined in recent months due to aggressive foreign exchange interventions.