Won hits 23-month high as dollar-selling pressure tests exporters and officials

  • South Korea's won reached 1,334.7 per dollar intraday on the 7th.
  • The National Pension Service halted further strategic-hedge expansion, market participants said.
  • Semiconductor exports and exporter sales increased dollar supply in the foreign-exchange market.

The won reached 1,334.7 per dollar intraday on the 7th, its strongest level in 23 months and the lowest dollar-won rate of the year, as exporters accelerated conversions of dollar export receipts. The National Pension Service has halted further expansion of strategic currency hedging, while foreign-exchange authorities said the fund may have bought dollars after the rate entered the 1,330-won range. Citi said the fund could stop increasing its strategic hedge ratio if the rate remains below 1,390 won, with existing hedges reduced gradually as currency swaps mature. Yen strength, robust semiconductor exports and expectations of further won gains have reinforced dollar-selling pressure. Earlier reports said authorities purchased about $20 billion of SK Hynix's $26.5 billion American Depositary Receipt proceeds and that the NPS had resumed dollar purchases, though officials did not confirm specific NPS transactions or hedging operations. Analysts view the pension fund as a brake on the pace of won appreciation rather than a force capable of reversing the broader downtrend in the dollar-won rate.

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