As won-dollar exchange-rate volatility widens, corporations' dollar deposits have hit the highest level in 3 years and 5 months.
According to the financial sector on the 14th, as of on the 11th, corporations' dollar deposit balance at the five major banks—KB Kookmin, Shinhan, Hana, Woori and NH NongHyup—totaled $54.371 billion. This is the largest since the end of January 2023 ($55.255 billion).
Corporations' dollar deposits steadily increased from $46.203 billion at the end of March to $49.028 billion at the end of April and $50.713 billion at the end of May. In the first 10 days of this month alone, they rose by $3.658 billion (7.2%). In contrast, individuals' dollar deposits fell by $139 million over the same period to $12.136 billion.
The Ministry of Finance and Economy and the Ministry of Trade, Industry and Resources held a meeting on the 11th with major exporting corporations, including Samsung Electronics, SK hynix and Hyundai Motor, and asked for the prompt conversion of export proceeds and an expansion of the repatriation of overseas retained funds. The Financial Services Commission and the Financial Supervisory Service also asked commercial banks to refrain from marketing related to dollar deposits.
However, as the exchange rate has surged, corporations are not readily releasing dollars. The average won-dollar exchange rate this month, based on weekly closing prices, was 1,523.3 won, the highest level since February 1998 during the foreign exchange crisis. The average daily exchange-rate fluctuation this month was also 10.1 won, expanding sharply from May's 6.6 won.