The won-dollar exchange rate closed at 1498.5 won on the 8th, falling below 1500 won for the first time since May 29. The rate had surged to 1559.20 won earlier this month before the recent decline reversed the upward trend. Financial investment industry analysts attribute the won's strengthening to SK Hynix's forward currency hedging ahead of its Nasdaq ADR (American Depositary Receipt) listing, which is scheduled to begin trading on the 10th with dollar inflows expected on the 15th. The rate drop occurred despite the dollar index rising to 101.02 on the 7th (local time), indicating won appreciation against broader dollar strength. Foreign exchange authorities conducted net dollar sales of $13.628 billion in Q1 2026, marking the second consecutive quarter of over $10 billion in net selling as officials intervened actively to stabilize the currency market.
Won-Dollar Rate Falls to 1498.5 Won on the 8th
According to the Seoul foreign exchange market on the 8th, the won-dollar exchange rate closed at 1498.5 won based on weekly trading, down 29.7 won from the previous day. The rate peaked at 1559.20 won during intraday trading this month before the recent upward momentum broke. The last time the rate fell below 1500 won was on May 29 (1494.9 won), approximately two months ago. The dollar index closed at 101.02 on the 7th (local time), up from the previous day (100.85), as international oil prices rose. The won strengthened against this backdrop.
The exchange rate had surged despite active market intervention by foreign exchange authorities. The Bank of Korea disclosed on the 30th of last month that Q1 2026 net foreign exchange transactions by authorities totaled minus (-) $13.628 billion, equivalent to 20.6 trillion won. This indicates that the Bank of Korea and the Ministry of Economy and Finance sold more dollars than they purchased through active market intervention. The past two quarters with net sales exceeding $10 billion were Q4 of last year and Q1 of this year.
SK Hynix Plans $30 Billion ADR Listing on Nasdaq
Observations suggest the won-dollar exchange rate received positive influence from SK Hynix's upcoming Nasdaq ADR listing. An ADR is a security that allows Korean company stocks to be traded in dollars on the US stock market. SK Hynix's planned ADR fundraising scale is up to $30 billion (2.5% of Hynix's issued shares, approximately 45.4534 trillion won), with trading scheduled to commence on the 10th. The actual dollar inflow into Korea is scheduled for the 15th.
Market Speculates SK Hynix Conducted Forward Currency Hedging
Market participants place weight on the possibility that SK Hynix's ADR influence was reflected in advance regarding the recent exchange rate decline over the past few days. SK Hynix may have implemented forward currency sales to convert dollars into won in advance. In this case, the exchange rate would be affected before the ADR listing depending on whether a split-sale strategy or lump-sum sale strategy was employed.
Forward currency transactions proceed in the order: SK Hynix → domestic banks → foreign banks. First, when SK Hynix submits a forward sale order to a domestic bank, the domestic bank borrows money from a foreign bank through short-term loans and supplies dollars to the domestic spot market. After SK Hynix lists and funds come in, the company repays the bank.
In other words, the analysis suggests SK Hynix may have taken preemptive measures out of concern for exchange losses that would occur if the exchange rate fell at the time of ADR listing.
However, since forward currency transactions are intended to hedge against exchange rates in industries where funds come in years later, claims are also raised that SK Hynix cooperated with foreign exchange authorities for rapid exchange rate stabilization. Opinions also emerge that speculative forces purchased dollars before the ADR listing out of concern for exchange losses, unrelated to SK Hynix.
Alternative Interpretations of Exchange Rate Movement
A foreign exchange authority official stated, "Foreign exchange transactions are measures taken when exchange rate volatility increases and herd behavior appears, so it is numerically correct that Q4 last year and Q1 this year had large scales." The official added, "If SK Hynix conducted forward currency transactions, domestic banks would need to conduct spot currency sales and foreign exchange swap transactions at foreign exchange business sites, so the transaction structure could affect the exchange rate."
FAQ
What caused the won-dollar rate to fall below 1500 won on the 8th?
The won-dollar rate closed at 1498.5 won on the 8th, marking the first time below 1500 won since May 29. Financial investment industry analysts attribute the decline to speculation that SK Hynix conducted forward currency hedging ahead of its Nasdaq ADR listing scheduled for the 10th, with dollar inflows expected on the 15th.
How much did foreign exchange authorities sell in Q1 2026?
The Bank of Korea disclosed that Q1 2026 net foreign exchange transactions by authorities totaled minus $13.628 billion (20.6 trillion won), indicating the Bank of Korea and Ministry of Economy and Finance sold more dollars than purchased through active market intervention.
When is SK Hynix's ADR listing scheduled?
SK Hynix's Nasdaq ADR trading is scheduled to commence on the 10th, with the actual dollar inflow into Korea expected on the 15th. The planned ADR fundraising scale is up to $30 billion (2.5% of issued shares).
