As the won-dollar exchange rate declines and stock market volatility increases, investors are rapidly shifting their funds. While dollar deposits and gold-related products are seeing significant inflows, sales of exchange-traded funds (ETFs) and the balances of negative bank accounts are decreasing, indicating a clear preference for safe assets among banks.
According to the financial sector on the 23rd, the total dollar deposit balance at the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) reached $749.2 billion as of the 20th. This marks the highest level since the banks began compiling combined statistics in May 2021.
The exchange rate, which approached 1,556 won per dollar in early July, closed at 1,386.5 won on the 21st, the lowest level in 11 months. The rapid decline in the exchange rate has led to increased demand for purchasing dollars.
With gold prices rebounding, sales of gold bars and related products have also increased. As of the 20th of this month, the sales of gold bars at the five major banks totaled 82.96 billion won, the highest level since January (85.94 billion won).
The balances of gold banking services offered by Kookmin, Shinhan, and Woori banks reached 1.81 trillion won as of the 20th, an increase of 94.8 billion won from the end of July (1.72 trillion won). This marks the first increase in gold banking balances in seven months since January.
The international gold futures price rose to $4,680.6 per ounce, a 15.5% increase compared to the end of last month. The recent slowdown in U.S. employment and inflation indicators has eased concerns about interest rate hikes by the Federal Reserve, contributing to the rise in gold prices.
Regular deposits are also accumulating. The balance of regular deposits at the five major banks reached 998.76 trillion won as of the 20th, nearing the 1,000 trillion won mark. In July alone, the balance increased by 35.54 trillion won, and it has risen by an additional 13.77 trillion won this month. Investors feeling fatigued from the 'rollercoaster' KOSPI appear to be locking their funds in banks.
Conversely, investor sentiment is becoming more cautious amid stock market fluctuations. The rise in long-term U.S. interest rates is exerting pressure on global financial markets, while changes in foreign investment in the domestic stock market are contributing to increased volatility in stock prices. Analysts suggest that the difficulty in predicting short-term stock price trends is leading more investors to adopt a wait-and-see approach.
The sales of ETFs at the five major banks totaled 463.4 billion won as of the 20th of this month, a decrease of 1.9955 trillion won (81%) compared to July. This figure is nearly a 97% drop from the peak sales in May (15.31 trillion won).
Demand for borrowing to invest is also waning. As of the 20th, the balance of negative bank accounts at the five major banks was 44.18 trillion won, down 65.2 billion won from the end of July. After increasing during the stock market boom—41.45 trillion won at the end of May, 43.28 trillion won at the end of June, and 44.17 trillion won at the end of July—this marks the first expected decrease in four months.
A banking sector official stated, "Recent inquiries from customers indicate a stronger tendency to secure cash or safe assets while monitoring market conditions rather than actively seeking profits. There is a prevailing atmosphere of adjusting investment timing while observing exchange rates, gold prices, and stock trends."
* This article has been translated by AI.
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