As of the end of May, corporations' dollar deposits stood at $82.99 billion, up $2.95 billion from the end of the previous month, the Bank of Korea said on the 26th. It was the highest since the Bank of Korea began releasing related statistics in 2012. With dollar earnings increasing on the back of strong semiconductor exports, the rise in the exchange rate appears to have strengthened the tendency to hold rather than convert into won. Based on weekly closing prices, the won-dollar rate has stayed above 1,500 won for 28 straight trading days from May 15 through the previous day.
Individual holdings, by contrast, fell. As the won-dollar rate rose, people sold the dollars they had been holding. According to the "Trends in Residents' Foreign Currency Deposits in May" released by the Bank of Korea that day, individual dollar deposits stood at $12.57 billion, down $700 million from the previous month. Individuals' share of total dollar deposits also shrank to 13.2% from 14.2% over the same period.
A Bank of Korea official said, "Individuals tend to react more sensitively to exchange rates," and added, "When the rate rises, there are cases where they dispose of dollars bought cheaply and realize exchange gains."
Dollar deposits including corporations and individuals totaled $95.56 billion, up $2.24 billion from the previous month. By contrast, yen deposits fell by $690 million and euro deposits fell by $280 million.
Total foreign currency deposits were $112.25 billion, up $1.57 billion from the previous month. The Bank of Korea said, "Dollar deposits increased due to receipts of current-account payments by large companies," and added, "Yen deposits fell due to a decline in securities firms' customer margin funds, and euro deposits decreased due to current-account payment outflows."