Won Surges Against Dollar Amid Semiconductor Boom
The South Korean won is experiencing a resurgence in strength against the US dollar, despite a firmer greenback and weaker yen. The won has been boosted by a surge in semiconductor dollars flowing into Korea, as well as a record current account surplus and Bank of Korea tightening.
According to data, the dollar-won rate has risen from 1,560s in June to the 1,360s. This is attributed to the $26.5 billion offering of American depositary receipts (ADRs) by SK hynix on July 10, which added a significant source of dollars.
Chip exporters have also been selling more dollars as they convert their export receipts into won for capital spending and tax payments. This has led to increased dollar supply in the market, supporting the strengthening of the won.
The Bank of Korea (BOK) has raised its base rate by a quarter point to 3 percent on Thursday, further tightening monetary policy and supporting the won's rally.