SK Hynix and Samsung Electronics drove the USD-KRW exchange rate lower on May 28 through large-scale dollar sales, offsetting custody dollar demand from foreign stock sell-offs. The exchange rate fell 3.40 won to 1,465.10 won as of 1:47 PM versus the prior close of 1,468.20 won. The downward pressure occurred despite foreign investors selling 3.7 trillion won in Korean stocks on the main board and over 4.5 trillion won across all markets, with KOSPI blue-chip stocks including SK Hynix and Samsung Electronics dropping more than 10 percent and triggering circuit breakers. SK Hynix sold over $2 billion in a single day from a combination of export revenues and proceeds from its American Depositary Receipt listing, which raised $26.5 billion. The semiconductor export boom has generated sustained dollar inflows that Korean companies are converting to won, creating persistent downward pressure on the exchange rate despite geopolitical uncertainties and foreign equity outflows.
USD-KRW Falls to 1,465.10 Won Amid Intraday Volatility
The USD-KRW exchange rate stood at 1,465.10 won as of 1:47 PM on May 28, down 3.40 won from the prior Seoul session close of 1,468.20 won. The pair remained in the 1,470 won range in early trading before turning downward around 11:00 AM, declining toward the 1,460 won level. The rate briefly touched 1,462.30 won, attempting to break into the 1,450 won range.
The downward movement occurred against the backdrop of intensifying foreign stock selling in Korean equities. Foreign investors sold 3.7 trillion won in the main securities market, with total selling across KOSPI, KOSDAQ, and NEXT Trade exceeding 4.5 trillion won. The KOSPI market triggered both a trading halt for program sell orders and circuit breakers as Samsung Electronics and SK Hynix shares fell more than 10 percent. The three-day streak of trillion-won-scale stock dumping generated custody dollar buying demand that pushed the exchange rate upward.
SK Hynix Sells Over $2 Billion in Single Day
SK Hynix sold over $2 billion in dollar holdings on May 28, combining negotiated transaction volumes and ADR conversion proceeds. The company raised $26.5 billion (approximately 40 trillion won) through its ADR listing and has been converting the funds to won in stages. Samsung Electronics also released negotiated dollar volumes at month-end, with semiconductor companies leading active dollar sales among export firms. Offshore investors added to the downward pressure by selling dollar futures, with foreign participants net selling approximately 52,000 dollar futures contracts in the currency futures market.
Analysts Forecast Continued Dollar Selling Pressure
Moon Jung-hee, chief economist at KB Kookmin Bank, stated that dollar conversion demand in the region is increasing due to strong export performance in major industries including electronics and shipbuilding. Moon noted that dollar selling by semiconductor companies including SK Hynix continues. Moon assessed that when the positive shift in FX swap points is attributed to increased dollar supply, additional downward pressure on the spot exchange rate can be expected to persist for the time being.
The dollar selling trend that drove USD-KRW lower this month is forecast to continue. Steady inflows of export revenues from the semiconductor boom and remaining ADR fund conversion volumes from SK Hynix are expected to sustain dollar selling over a considerable period. The possibility of forward exchange sales by heavy industry companies for currency hedging also weighs on USD-KRW. Hanwha Ocean has drawn attention by operating a hedging strategy to raise its currency hedge ratio above 70 percent, with some market participants anticipating potential forward exchange sales accompanying large-scale order announcements.
FAQ
What caused the USD-KRW exchange rate to fall on May 28?
SK Hynix and Samsung Electronics sold large dollar volumes on May 28, driving the USD-KRW exchange rate down 3.40 won to 1,465.10 won as of 1:47 PM. SK Hynix sold over $2 billion from export revenues and ADR listing proceeds, while Samsung Electronics released month-end dollar holdings, creating downward pressure that offset custody dollar buying from foreign stock sell-offs.
How much did SK Hynix raise from its ADR listing?
SK Hynix raised $26.5 billion (approximately 40 trillion won) through its American Depositary Receipt listing and has been converting the proceeds to won in stages, contributing to sustained dollar selling pressure in the Korean foreign exchange market.
Why do analysts expect continued USD-KRW downward pressure?
KB Kookmin Bank chief economist Moon Jung-hee stated that dollar conversion demand is increasing due to strong export performance in electronics and shipbuilding, with semiconductor companies including SK Hynix continuing dollar sales. Moon assessed that the positive shift in FX swap points attributed to increased dollar supply indicates additional downward pressure on the spot exchange rate will persist for the time being.
