Government Requests Increased Dollar Supply from Major Exporters to Stabilize Currency

The South Korean government has requested major exporters, including Samsung Electronics and SK Hynix, to expand their foreign currency deposits and export proceeds as part of efforts to stabilize the foreign exchange market.

On July 21, the Ministry of Economy and Finance held a meeting at the Government Seoul Complex with key exporters such as Samsung Electronics, SK Hynix, Hyundai Motor, Kia, HD Korea Shipbuilding & Offshore Engineering, Hanwha Ocean, and Samsung Heavy Industries.

During the meeting, Deputy Minister Heo Jang stated, "The won-dollar exchange rate, which had risen to the 1550 won range just before last month’s exporters' meeting, has recently dropped to the upper 1400s, indicating a partial easing of the foreign exchange market's supply-demand imbalance."

He explained that the decline in the exchange rate was influenced by an increase in export companies' negotiation volumes, shipbuilders' forward foreign exchange sales, and capital inflows from SK Hynix's issuance of American Depositary Receipts (ADRs). He also noted that the dollar-buying trend among offshore investors, which had expanded due to a bet on the won's depreciation, is also easing.

Heo emphasized, "The foreign currency supply and demand in the second half of the year is expected to improve further, supported by the robust fundamentals of our economy, including favorable semiconductor market conditions. While external uncertainties persist due to ongoing conflicts in the Middle East, the government's commitment to stabilizing market expectations is firm."

He added, "We have sufficient capacity to respond to market stability needs and urge major exporters to actively participate in the exchange of export proceeds and foreign currency deposits, as well as the repatriation of overseas retained earnings in light of the changing foreign exchange market conditions."

Attendees at the meeting agreed that stabilizing the foreign exchange market is essential for reducing management uncertainties and establishing a stable investment and operational foundation. They also committed to supporting the government's efforts to stabilize supply and demand, which could lead to improved conditions in the foreign exchange market.