Korean Banks See Record Corporate Dollar Deposits Amid Strengthening Won

Corporate dollar deposits at major South Korean banks have reached an all-time high this month. As of Thursday, the outstanding dollar deposits at five major local banks stood at $76.98 billion, a record since May 2021 when banks began compiling such data.

The won-dollar exchange rate has risen by 254.2 won from its lowest level in almost two years, with the Korean won quoted at 1,345 won per dollar as of Friday. Exporters are delaying exchanging their export proceeds to the Korean won, while import companies are actively buying US dollars in installments.

The demand to exchange the won into the dollar is also growing, with a total of $60 million exchanged from the Korean won to the US dollar in the first three days of this month at the five banks. This comes after a sharp decline in June and a subsequent rebound in July.