It was analyzed that dollar buying, which had been based on expectations for a further rise in the exchange rate, has weakened. Since the end of last year, as foreign exchange authorities have been making all-out efforts to stabilize the exchange rate, corporations have been selling some of their dollars. The buying by individual investors, who had been hoarding dollars, also appears to be calming.
According to the financial industry on the 25th, as of the 22nd, the balance of dollar deposits at the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH NongHyup) was analyzed at a total of $63,248.3 million. It fell by $2,476.74 million (3.8%) from the end of last month ($65,681.57 million). Dollar deposits refer to products in which won are exchanged into dollars and set aside, then withdrawn or converted back into won at maturity. After surging for two consecutive months starting in October last year when the won-dollar exchange rate began to spike, this deposit balance turned to a decline this month.
In particular, the decline was large in the deposit balance of corporations, which account for about 80% of all dollar deposits. The corporations' dollar deposit balance increased to $44,324.54 million at the end of October last year, $46,570.11 million at the end of November, and $52,416.43 million at the end of December, then fell sharply to $49,830.06 million on the 22nd of this month.
In the case of individuals' dollar deposit balance, it increased for six consecutive months from the end of July last year to this month, but the pace of increase slowed significantly. Individuals' balance rose from $13,265.13 million at the end of last month to $13,374.77 million on the 22nd of this month, up $109.64 million. Compared with the $1,098.71 million increase in just one month last month, that is about one-tenth.
Demand for dollar exchange is also slowing. The amount that individual customers exchanged from won to dollars (cash basis) at the five major banks totaled $363.82 million from the start of this month through the 22nd. The average daily exchange during this period was $16.54 million, about 50% higher than last year's average daily exchange ($10.18 million). However, the amount exchanged from dollars to won during the same period also reached an average daily $5.2 million, far exceeding last year's average daily exchange ($3.78 million).