The fluctuating exchange rate of the Korean won against the U.S. dollar and the rising yields on U.S. government bonds are complicating corporate strategy for major companies. The volatility in macroeconomic indicators has made it difficult for firms to establish quarterly plans.
On September 7, the exchange rate closed at 1,340.5 won per dollar in the Seoul foreign exchange market, marking a decline of about 14% from its peak in June.
Exchange rate fluctuations are seen as a direct factor affecting corporate performance. Samsung Electronics reported that the strong dollar positively impacted its operating profit by approximately 3.1 trillion won in the second quarter compared to the previous quarter. Hyundai Motor also noted that the exchange rate effect contributed an additional 2.571 trillion won in sales and 238 billion won in operating profit for the same period. Conversely, if the won strengthens rapidly, the benefits previously enjoyed from the exchange rate could diminish.
Industry insiders suggest that the speed of exchange rate changes poses a greater burden than its absolute level. One industry official stated, "Even after setting quarterly plans, we have to revise our assumptions about the exchange rate within weeks," adding that the increasing uncertainty makes it challenging to finalize investment timelines. While stable exchange rates, whether high or low, can be incorporated into business plans, drastic shifts in direction over a few months necessitate recalculating sales prices, costs, and investment resources. Companies with significant overseas sales and investments, such as Samsung Electronics, SK Hynix, Hyundai Motor, and LG Electronics, are reportedly re-evaluating their scenarios regarding exchange rates and interest rates.
In contrast, U.S. Treasury yields are on the rise. The yield on 10-year bonds reached 4.817% during trading on September 2, the highest level since November 2023, and was at 4.78% on September 4. Analysts attribute this increase to the widening U.S. fiscal deficit, inflationary pressures, and the potential for further interest rate hikes.
The burden of rising interest rates is also identified as a factor disrupting corporate plans. U.S. Treasury yields serve as a benchmark for global corporate bonds and loan rates. Companies like Samsung, SK, Hyundai, and LG, which are making substantial investments in overseas factories and AI data centers, face increased costs for bond issuance and borrowing as long-term rates rise. As the baseline for investment returns also increases, there is speculation that they may need to reassess the timing and scale of their projects.
A survey conducted by the Korea Chamber of Commerce and Industry of 2,470 manufacturing companies found that 55.6% have revised their management plans for the second half of the year following changes in the Middle East situation. Among them, 59.3% adjusted their sales prices and delivery costs, while 56.4% modified their procurement methods for raw materials. Additionally, 19.7% reported changes to the scale or timing of new investments.
Lee Min-hyuk, a researcher at KB Kookmin Bank, stated, "If rising U.S. long-term interest rates increase capital costs for hyperscalers, it could dampen AI investments and the semiconductor industry, which may in turn exert downward pressure on the won through the Korean economy and stock market." This suggests that fluctuations in U.S. Treasury yields and exchange rates could simultaneously impact the performance of export companies like Samsung Electronics and SK Hynix, as well as demand for AI investments.
* This article has been translated by AI.
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