Korean firms delay converting dollars into won as local currency strengthens
Dollar deposits at Korea's five largest banks climbed to a record high as companies accumulated the U.S. currency, with the won trading at its strongest level in 23 months, data showed Sunday. Dollar deposits at KB Kookmin, Shinhan, Hana, Woori and NH NongHyup reached a record $76.98 billion as of Thursday, the highest since comparable data collection began in May 2021. The total rose by more…
Korean firms are delaying the conversion of dollars into the local won as the Korean currency strengthens, according to data released on Sunday. The country's five largest banks reported record high deposits of U.S. dollars, with a total of $76.98 billion as of Thursday, the highest level since May 2021. This surge in dollar deposits, up by over $6.9 billion in August and an additional $600 million in the first three days of September, comes as companies find it advantageous to hold onto the stronger won rather than converting their dollar earnings.
Most of this increase was attributed to corporate deposits, as exporters postponed converting their dollar revenues, while importers gradually accumulated the U.S. currency for future payments. Individual dollar deposits also reached a record high of $13.68 billion, marking the highest level since February 2022, with individuals converting $389 million worth of won into dollars in August, the largest single monthly conversion since January.
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