Seoul— Corporate dollar deposits at South Korean banks rose at the fastest pace this year in November, as companies increased their holdings in response to a strengthening U.S. dollar, industry data showed Sunday.
Outstanding dollar deposits at five major commercial banks, including KB Kookmin Bank and Shinhan Bank, reached $53.7 billion as of Thursday, up 21 percent from $44.3 billion in October, according to data cited by Yonhap News Agency. The increase marks the largest monthly gain in 2025.
Dollar deposits involve converting South Korean won into U.S. dollars for a fixed term, after which funds are either withdrawn or converted back into won. Typically, a stronger dollar prompts investors to realise profits, often reducing deposit balances. However, November bucked this trend.
Banking insiders said companies sought to expand their dollar holdings amid rising U.S. investment opportunities and heightened uncertainty in foreign exchange markets.
“Following U.S. President Donald Trump’s election last December, corporate currency exchange transactions and dollar deposits hit record highs. This month saw the largest increase so far this year,” said an official at a local bank.
Individual investors have also contributed to the trend, with their dollar deposits reaching $12.2 billion as of Thursday, marking the fourth consecutive monthly increase since August. The growth has been driven by rising investment in overseas stock markets and expectations of a stronger dollar.
The surge in dollar deposits comes amid a sharp depreciation of the South Korean won, which has fallen from around 1,390 won per dollar on September 1 to approximately 1,470 won on Friday, despite repeated verbal interventions by authorities.
“Amid recent volatility in the foreign exchange market, there is a trend, particularly among companies, to increase foreign currency holdings,” said another banking official. (Source: IANS)
