Korean Won Strengthens to Near Two-Year High, Boosting Corporate Dollar Deposits

Corporate dollar deposits in South Korea have reached a record high this month as the Korean won has strengthened against the US dollar. According to industry data, the outstanding dollar deposits at five major local banks stood at $76.98 billion as of Thursday, surpassing previous records since May 2021.

The weakening dollar exchange rate is attributed to rising export proceeds and delayed conversions by exporters, while import companies are actively buying dollars in installments. Baek Seok-hyun, an economist at Shinhan Bank's S&T Center, noted that 'dollar deposits are growing as export proceeds come in, while exporters delay exchanging them to the Korean won.'

The won-dollar exchange rate has risen by 254.2 won from its all-time low of 1,588.2 won per dollar recorded on July 1.