Won Surges Amid SK Hynix Dollar Inflows, Eyes Further Gains
The South Korean won has experienced its biggest monthly gain since 2009, driven by a surge in U.S. dollar inflows into the country's foreign exchange market following SK hynix Inc.'s American depositary receipt (ADR) offering on the Nasdaq.
According to industry data, the won appreciated at an annualized pace of 7.95% against the dollar in July, with a monthly gain of 125.4 won since June's end.
The currency has rebounded from its more than 17-year low of 1,599.2 won per dollar on July 1, and experts attribute the strength to heavy dollar inflows after SK hynix converted proceeds from its ADR offering into the local currency.
SK hynix raised about 40 trillion won (US$26.5 billion) through its ADR offering, which it plans to use for domestic investments, including the Yongin semiconductor cluster.
Economists expect the won to remain on an upward trajectory due to stronger-than-expected economic growth and anticipated interest rate hikes by the Bank of Korea, narrowing the rate differential with the United States.