Last year, the share of exports by Korea's corporations that were paid for in won hit an all-time high. Corporations generally prefer the U.S. dollar, the key currency, for international transactions. The trend was expected to be even more pronounced last year, when the dollar strengthened and the won weakened. So why did the share of won settlements increase?
◇ when the shares of the dollar, euro and yen fell, only the won rose by 0.8 percentage point
According to the "2025 exports and imports by settlement currency" statistics released by the Bank of Korea on the 16th, the U.S. dollar accounted for the largest share of export settlement payments last year at 84.2%, followed by the euro (5.9%), the won (3.4%), the yen (1.9%) and the yuan (1.3%).
Compared with a year earlier, the share of won settlements rose notably. The share of won settlements increased by 0.8 percentage point from the previous year, the highest since related statistics began in 1992. In contrast, the share of the U.S. dollar fell by 0.3 percentage point, and the euro, yen and yuan each fell by 0.2 percentage point.
In international settlements, market participants usually prefer the U.S. dollar, a key currency and a safe asset. Both exporting corporations and importing corporations want to avoid exchange-rate volatility. In particular, during periods like last year when the won-dollar rate swung widely from the upper 1,350-won range to the upper 1,480-won range, dollar preference likely grew stronger.
Even so, the share of won settlements increased because exports of semiconductor equipment and automobiles were strong. Semiconductor manufacturing equipment exported by Korea is often used when domestic corporations build plants overseas. Because these have the character of inter-affiliate transactions, a high share is settled in won.
For automobiles, the share of won settlements rose as used-car exports to the Commonwealth of Independent States (CIS) increased last year. The CIS includes Russia, Belarus, Kazakhstan and Kyrgyzstan. Exporting corporations tend to prefer won settlements instead of the highly volatile currencies of these countries.
◇ share of won in import settlements also rises… surpasses the euro and yen for No. 2
The share of won settlements also grew on the import side. By currency, the U.S. dollar accounted for the largest share of import settlement payments at 79.3%, with the won second at 6.6%. They were followed by the euro (6%), the yen (4%) and the yuan (3.2%). Compared with a year earlier, the dollar's share fell by 1.1 percentage points, while the won's rose by 0.3 percentage point.
The decline in the value of settlements for energy items such as crude oil, gas and coal—where dollar settlements are prevalent—had a significant impact. The settlement value itself decreased due to lower global oil prices. The import unit price of crude oil, the benchmark for crude oil import prices, fell 11.1% from $82.9 per barrel in 2024 to $73.2 last year.
The gap left by reduced energy settlements was filled by increased automobile imports, which have a high share of won settlements. Imported cars entering Korea are mainly sold by multinational corporations with subsidiaries in multiple countries. These corporations can partially offset declines in a particular currency's value with revenue in other currencies. As a result, most automobiles imported into Korea are settled in won.