SK Hynix went public in the US and set a record for fund-raising. The Korean won was boosted by this. As a result, South Korea's regulatory authorities gained new impetus to push major exporters to return overseas dollar funds back to the mainland. The chip maker raised $265 billion through this listing, and the market has observed that it continues to sell dollars, directly laying the foundation for the subsequent strengthening of the won. At a working meeting held last week, South Korea's Deputy Minister of Finance Xu Chang called on exporters to exchange a larger share of overseas revenue for Korean won and recover funds that have been stranded overseas for a long time. Hynix's large-scale settlement fully proves that a single enterprise's capital operation can change the trend of the foreign exchange market. This has also strengthened the South Korean regulatory authorities' mentality: leading exporters within the United Nations worked together for several months to stabilize the exchange rate, rather than simply relying on foreign exchange reserves to directly intervene. The core logic of this strategy is that the effectiveness of corporate independent settlement is superior to costly direct official market entry intervention. Stephen Lee, an economist at Seoul Merrill Lynch Securities, said, “The wave of dollar sell-off initiated by SK Hynix has had a chain amplification effect. In addition to Hynix's remittance settlement due to US Depositary Receipts, the continued strengthening of the Korean won also prompted other companies that previously delayed the exchange of foreign currency revenue to follow up and sell the US dollar.” Despite foreign investors selling stocks, the won rebounded about 6% against the US dollar in July. This month, the won became the top performing currency in Asia, and it had been the worst performing currency in the region until the first half of the year.
Zhitongcaijing · 2d ago
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SK Hynix went public in the US and set a record for fund-raising. The Korean won was boosted by this. As a result, South Korea's regulatory authorities gained new impetus to push major exporters to return overseas dollar funds back to the mainland. The chip maker raised $265 billion through this listing, and the market has observed that it continues to sell dollars, directly laying the foundation for the subsequent strengthening of the won. At a working meeting held last week, South Korea's Deputy Minister of Finance Xu Chang called on exporters to exchange a larger share of overseas revenue for Korean won and recover funds that have been stranded overseas for a long time. Hynix's large-scale settlement fully proves that a single enterprise's capital operation can change the trend of the foreign exchange market. This has also strengthened the South Korean regulatory authorities' mentality: leading exporters within the United Nations worked together for several months to stabilize the exchange rate, rather than simply relying on foreign exchange reserves to directly intervene. The core logic of this strategy is that the effectiveness of corporate independent settlement is superior to costly direct official market entry intervention. Stephen Lee, an economist at Seoul Merrill Lynch Securities, said, “The wave of dollar sell-off initiated by SK Hynix has had a chain amplification effect. In addition to Hynix's remittance settlement due to US Depositary Receipts, the continued strengthening of the Korean won also prompted other companies that previously delayed the exchange of foreign currency revenue to follow up and sell the US dollar.” Despite foreign investors selling stocks, the won rebounded about 6% against the US dollar in July. This month, the won became the top performing currency in Asia, and it had been the worst performing currency in the region until the first half of the year.
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