Koreans Rush to Buy Dollars as Won Strengthens Against Greenback

Koreans are taking advantage of the strengthening South Korean won against the US dollar by buying up dollars and investing in financial products that allow them to earn interest on their foreign currency holdings.

According to Park, an office worker who recently opened a foreign currency account with Toss Bank, the exchange rate fell below 1,400 won per dollar for the first time in nearly a year, prompting her to look for ways to buy dollars and profit from the stronger won.

As the exchange rate continues to fall, more Koreans are looking to lock in dollars for future use. The Bank of Korea's decision to raise interest rates twice in succession has narrowed the gap with US rates, making it less attractive for investors to hold dollars, but expectations for further Federal Reserve hikes have faded.

The rush to buy dollars has also pushed up foreign currency deposits held by Korean residents and companies, with the Bank of Korea reporting a record $128.34 billion in such deposits at the end of July, up from $113.33 billion just a month earlier.