As of the end of July, corporations' U.S.-dollar deposits totaled $95.69 billion, the highest since related statistics began in 2012, the Bank of Korea said on the 28th. The month-over-month increase ($10.11 billion) was also the largest on record. The rise is attributed to a sharp increase in dollar inflows at major conglomerates thanks to strong semiconductor exports.
According to the Bank of Korea's "trend of residents' foreign-currency deposits in July" released that day, of corporations' foreign-currency deposits of $112.56 billion, the share in U.S. dollars was 87.7%, up from 87.5% the previous month.
Behind the increase in corporations' dollar holdings was greater inflow of current-transaction payments centered on large conglomerates. As corporations sold dollars in the foreign-exchange market, the won-dollar rate fell quickly, but the amount of dollars earned from exports exceeded the selling volume. A Bank of Korea official said, "A lot of foreign currency is being supplied to the market, but so much is coming in that the overall balance has increased significantly."
An expansion in buying by importers and small and midsize enterprises seeking to purchase dollars in advance at low prices also had an impact. The won-dollar rate fell from 1,594.4 won at the end of June to 1,424 won at the end of July. Recently, it dropped to the 1,380-won range. Due to the lower exchange rate, individuals' U.S.-dollar deposits rose by $1.01 billion from the previous month to $13.23 billion.
Total U.S.-dollar deposits, including those of individuals and corporations, increased by $11.12 billion to $108.92 billion, a record high. It marked the second straight month of record highs following June.