South Korea’s dollar-denominated repurchase agreement balance has declined for eight consecutive months in 2025 as lower U.S.-linked yields, a stronger won and weaker reinvestment reduce demand. The average daily balance stood at $14.25 billion this month, down 34.9% from $21.90 billion in December last year, according to the Korea Securities Depository on August 21. More than $3 billion was shed in less than two months during the second half of the decline, as new investments and reinvestments failed to offset maturing positions. Dollar RPs let investors convert won into dollars or deploy existing dollar holdings for short-term interest income, but won-based investors remain exposed to currency losses. Rates have fallen from the upper 3% range for on-demand products and around 4% for fixed terms to the low-to-mid 3% range after U.S. rate cuts late last year. Bond-lending balances also declined to 210.82 trillion won from more than 240 trillion won in the first half. Expanded U.S. Treasury buybacks and falling long-term yields may reinforce expectations of lower short-term rates, while the future path of U.S. monetary policy and the won-dollar exchange rate will shape any recovery in dollar repo demand.