South Korean Banks' Corporate Dollar Deposits Hit Record High This Month

Data released on Sunday showed that corporate dollar deposits at major South Korean banks hit a record high this month as the won fell to a near two-year low against the U.S. dollar. According to Sina Finance, the dollar deposit balance at South Korea's five largest domestic banks reached $76.98 billion as of Thursday, the highest level since the statistic was first compiled in May 2021. The five banks are KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, and NH Nonghyup Bank. At 10:30 p.m. on Friday, the won was quoted at 1,345 per dollar, its strongest level since October 8, 2024, when the rate was 1,344.6 per dollar. Compared with the record low of 1,588.2 per dollar set on July 1, the won had recovered 254.2 won. Shinhan Bank economist Baek Seok-hyun said exporters were delaying the conversion of foreign-exchange earnings into won, which pushed up dollar deposits, while importers were also buying dollars in stages. Demand to exchange won into dollars has also been rising. Data showed that in the first three days of this month, the five banks' total won-to-dollar exchange volume reached $60 million. Monthly exchange volume was $275 million in February, fell sharply to $164 million in June, and rebounded to $349 million in July. An NH Nonghyup Bank official said individuals began buying dollars as the won weakened in July and August, and demand for dollars to invest in U.S. stocks also increased.