Won Posts Strongest Monthly Gain Since 2009 on Dollar Supply Boost
The Korean won has experienced its strongest monthly gain against the US dollar since March 2009, rising to 1,424.0 per dollar by the end of July.
This improvement was driven by an increase in dollar supply, as major exporters such as SK hynix converted part of their proceeds from the American depositary receipt (ADR) offering into won. The chipmaker raised around $26.5 billion from its ADR listing on Nasdaq and pledged to use some of the funds for domestic investment.
The improved dollar supply, combined with reduced foreign selling of Korean equities and a narrowing interest rate gap with the US, has contributed to the won's strength. The Bank of Korea raised its benchmark interest rate by 25 basis points in July, further supporting the currency.